dcsimg

Study: Car insurance customer satisfaction ratings decline

By Barbara Marquand on July 10th, 2013

Car insurance customers who get a heads up about an upcoming premium increase are less likely to switch insurers than those who get hit with a rate hike out of the blue, according to a new report from J.D. Power.

Not surprisingly, customer satisfaction drops when car insurance rates go up, according to the J.D. Power 2013 U.S. Auto Insurance Study. But the drop isn't as steep if insurers inform customers about the rate hikes ahead of time and discuss options for mitigating the price increase.

It's an important point in today's low-interest environment when many insurers are filing for new rates to rectify underwriting losses, Jeremy Bowler, senior director of J.D. Power's global insurance practice, says in a press statement.

"To prepare for the likely downturn in customer sentiment and risk of increased attrition following a premium increase, insurers need to do a better job of proactively reaching out to their customers and explaining the reasons behind the rate increases," he says.

Only 16 percent of customers with a rate hike say they had any discussion with their insurer about changing their coverage, the report says.

Customer satisfaction declines

Overall customer satisfaction with car insurers is 794 on a 1,000-point scale, down 10 points from last year, according to the study. However, that number is still higher than it has been for most of the last decade.

The annual study measures customer satisfaction across five factors -- interaction with insurance companies, price, policy offerings, billing and payment, and claims. Scores decreased year over year for each factor, but dropped the most for price and policy offerings. More customers in this year's study were recently hit with premium hikes, and the rate increases were larger compared to those reported in the 2012 study. The average rate increase experienced by customers for the 2013 study was $153 compared to $113 reported in the 2012 study.

The study also includes customer satisfaction ratings by region. The top-rated insurers by region and their scores, on a 1,000-point scale are:

California

  • Wawanesa, 820
  • State Farm, 812
  • The Hartford, 811

Central

  • State Farm, 833
  • Auto-Owners Insurance, 821
  • Shelter, 817

Florida

  • MetLife, 808
  • The Hartford, 802
  • State Farm, 800
Mid-Atlantic
  • State Farm, 836
  • Erie Insurance, 826
  • GEICO and The Hartford, 811 each
New England
  • Amica Mutual, 850
  • GEICO and State Farm, 794
  • The Hartford, 793
New York
  • New York Central Mutual, 814
  • State Farm, 807
  • Travelers, 783
North Central
  • Auto-Owners, 833
  • State Farm, 824
  • Erie Insurance, 823
Northwest
  • PEMCO Insurance, 834
  • The Hartford, 820
  • Mutual of Enumclaw, 813
Southeast
  • Tennessee Farm Bureau, 850
  • State Farm, 822
  • North Carolina Farm Bureau, 821
Southwest
  • State Farm, 824
  • The Hartford, 821
  • GEICO, 809
Texas
  • Texas Farm Bureau, 862
  • GEICO, 815
  • State Farm, 810

New Jersey Manufacturers Insurance Co. and USAA also achieved high scores for customer satisfaction in the study, but they were not included in the rankings because their memberships are closed.

See average annual insurance rates for more than 2,000 vehicles

Top Auto Insurance Provider
Twitter
Facebook 470 flares Google+
470 flares ×