J.D. Power study finds many drivers unsatisfied with total-loss claims

By Mark Vallet on November 11th, 2011

A recent study by J.D. Power and Associates found that auto insurance claimants who suffer a total loss are notably less satisfied with the claims process than drivers whose car can be repaired. The 2011 Auto Claims Satisfaction Study reveals that dissatisfaction with settlement offers and a lack of timely communication left total-loss claimants with a bad taste in their mouths. While a few insurers excelled in these categories, many of them missed the mark.

What customers want

J.D. Power found that there are three traits that consumers value in an auto insurance provider when dealing with an accident claim.

  • Communication. This is the No. 1 thing claimants value. Clearly explaining the claims process and setting a realistic time frame for a settlement offer goes a long way in boosting customer satisfaction. Roughly 40 percent of claimants mentioned communication as a key factor in the claims process.
  • Speed. A total-loss claim is a big inconvenience and customers appreciate a quick settlement. The report found that a total-loss claim could take up to 18.2 days, compared to 12.5 days for a repairable claim. Insurance companies that quickly settled a claim earned a better ranking in the report.
  • Fairness. A fair settlement is highly valued by total-loss claimants. The study found that a whopping 50 percent of total-loss claimants felt that the settlement offer did not offer enough value to replace their car with a similar vehicle. J.D. Power encourages insurers to clearly explain the settlement offer in person.

Auto-Owners comes out on top

Auto-Owners Insurance snagged a top rating for the fourth year in a row. The company scored high in all six categories J.D. Power measured. Explaining the claim process during the initial contact was one of the company's biggest strengths.

State Farm jumped up a number of spots to finish second in the car insurance claims rankings. Amica ranked third and was the only insurer where total-loss claimants were just as satisfied as repairable claimants. Amica scored high on factors that measured satisfaction with communication and was noted for returning phone calls in a timely manner and updating claimants on the process.

Tips for total-loss claimants

J.D. Power offers the following tips to total-loss claimants:

  • Ask for a detailed report that breaks out the insurance settlement offer. Verify the make and model of the vehicle as well as any upgraded trim levels or aftermarket accessories. Make sure you are in agreement on the vehicle condition.
  • If you disagree with the settlement offer, it is possible to negotiate something better. Roughly 20 percent of claimants rejected their offer and negotiated a higher figure 80 percent of the time.
  • Review the comparable vehicles your insurer used when coming up with a settlement offer. Verify they are comparable to the trim level of your vehicle.
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