Study: Americans happier with auto insurance despite rising costs

Americans have become more satisfied with their auto insurance companies, according to a new study by J.D. Power and Associates, even as out-of-pocket costs have risen, Read writes.

Reed Saxon/AP/File
In this May 2010 file photo, the rush hour commute starts in early afternoon on Interstate 405 on the Westside of Los Angeles. Americans have an improved opinion of insurance companies, according to a new survey.

With initial damage estimates for Hurricane Sandypegged at $20 billion or more, insurance companies are facing a very busy couple of weeks. But while they brace for massive payouts, agencies can take heart in one bit of very good news, courtesy of J.D. Power and Associates2012 U.S. Auto Claims Satisfaction Study -- namely, that Americans have become more satisfied with their auto insurance companies, even as out-of-pocket costs have risen.

To reach those conclusions, Power surveyed over12,508 insurance customers who had filed and settled claims within the past six months. The survey took place over an 11-month period, from November 2011 to September 2012. 

(Power noted that the survey focused on customers whose vehicles were significantly damaged; those with damage to their car's glass or who only filed claims for roadside assistance were excluded. Stolen vehicles were also excluded.)

Survey participants were asked to rate satisfaction with their insurance company in six areas: "first notice of loss; service interaction; appraisal; repair process; rental experience; and settlement". Scores were doled out on a scale of 0 to 1,000. Here are the major takeaways:

  • Satisfaction improved by six points from last year: the average overall score for 2012 was 852.
  • When it comes to settlement -- arguably the most important factor -- average scores were up nine points from 2011, resting at 846.
  • Interestingly, those who filed total-loss claims were even happier with their settlements: for them, scores were 16 points higher. That could be due to the fact that payouts for total losses were up an average of $690 from last year -- mostly because of sky-high used-car values.
  • Satisfaction might also be rising because the insured feel like the claims process is more transparent. This year, 64% of those surveyed said that their insurer offered ways to keep them informed of their claim's progress (via online updates and such). In 2011, that figure was 61%.
  • Curiously, satisfaction grew even as out-of-pocket expenses crept upward. On average, respondents paid $403 for deductibles, rentals, and other uncovered expenses, which is up $26 from 2011.
  • America's favorite insurance company is Auto-Owners Insurance, which earned the highest overall score (887) for the fifth straight year. Rounding out the top five were Amica Mutual and Erie Insurance (tied at 876), and Automobile Club of Southern California and COUNTRY (tied at 874).
  • At the other end of the scale, Commerce was America's least-favorite agency, with a score of (781). Esurance fared slightly better (801), as did Encompass (820), 21st Century (821), and Mercury (824).
  • National heavy-hitters were all over the map: State Farm (868), Allstate (863), and Travelers (857) came in above the industry average of 852. Nationwide (848), GEICO (842), Progressive (842), and Farmers (838) didn't.

If you'd like a look at the management discussion of the J.D. Power report (which is less about rankings and more about consumer theory), you can find the PDF here.

And if you happen to live along the eastern coast of the U.S., we hope you're safe and sound. We also hope that you don't have too much need for your insurer, but if you do, we hope the claims process goes smoothly.

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.