WESTLAKE VILLAGE, Calif. — Auto insurance claimants who incur a total vehicle loss are notably less satisfied with the claims experience than are claimants who incur a repairable vehicle claim, according to the J.D. Power and Associates 2011 U.S. Auto Claims Satisfaction Study(SM) released today.
Satisfaction averages 811 on a 1,000-point scale among claimants with a total loss—42 points lower than among those whose vehicle is repaired. This gap is largely due to a lack of satisfaction with the settlement among total loss claimants, with approximately one-half of these claimants citing the settlement they received wasn’t enough to replace their totaled vehicle with a similar make/model vehicle.
“Auto claims resulting in a total loss tend to be more complex, compared with vehicle repair claims, because in addition to filing a claim, claimants also have to purchase a replacement vehicle,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. “Ongoing communication and managing expectations are key throughout the entire claims process, as total loss claims take 18.2 days, on average, for claimants to receive payment, compared with just 12.5 days for the return of a repaired vehicle. Making the claimant aware of how quickly they’ll receive the settlement and providing a thorough explanation of how the settlement amount was calculated are crucial to improving the overall experience in those instances of total loss.”
Insurers can deliver a satisfying experience by addressing three primary needs throughout the claims process:
- Communication—Insurers must not only be available when claimants have questions, but must also make the effort to clearly explain the claims process, follow up in a timely manner and keep claimants informed throughout the claims process.
- Speed—Insurers must quickly move the claim along from first notice of loss, to the appraisal, to communicating settlement amounts and ultimately paying claimants. Currently, total loss claimants report having to wait an average of four days to receive a settlement offer following damage appraisal.
- Fairness—Claimants want to be treated fairly regarding the settlement and avoid surprises during the process, whether caused by unexpected out-of-pocket expenses or not fully understanding what their policy covers in a claims situation.
The study measures claimant satisfaction with the claims experience for auto physical damage loss. Depending on the complexity of a claim, the claimant may experience some or all of the following factors measured in the study: first notice of loss; service interaction; appraisal; repair process; rental experience; and settlement. Settlement is the most important factor in overall satisfaction among both total loss and repair claimants.
Auto-Owners Insurance ranks highest in overall satisfaction with the claims experience for a fourth consecutive year, achieving a score of 890. Auto-Owners Insurance performs particularly well in all six factors. State Farm follows in the rankings with a score of 878, improving considerably from 2010. Amica Mutual ranks third with 865. New Jersey Manufacturers Insurance Company and USAA also achieve high levels of customer satisfaction, although they are not included in the rankings due to the closed nature of their respective memberships.(1)
Bowler offers the following tips for auto insurance customers during the claims process:
- Request a printed report detailing your settlement. Ensure the vehicle specifications your insurer uses are correct and factor in any vehicle upgrades, the condition of your vehicle and any after-market accessories.
- Check that the comparable vehicles used to determine the value of your vehicle are indeed similar.
- Ask the adjuster to look at your vehicle in person if you received a desk settlement that you believe isn’t accurate.
“It’s important for customers to examine the settlement offer and, in particular, verify the vehicle content and condition,” said Bowler. “The majority of customers who disputed their vehicle’s valuation most often cited differences concerning comparable vehicles (56%), vehicle condition (53%) and aftermarket accessories (18%).”
The 2011 U.S. Auto Claims Satisfaction Study is based on more than 11,500 responses from auto insurance customers who filed a claim within the past 12 months. The study excludes claimants whose vehicle only incurred glass/windshield damage or was stolen, or who only filed roadside assistance claims. The study was fielded March through July 2011.
(1) New Jersey Manufacturers Insurance Co. is an insurance provider open only to New Jersey Business & Industry Association members, State of New Jersey employees, NJM’s previously insured drivers, and/or previous/current auto/homeowner policyholders. USAA is an insurance provider open only to U.S. military personnel and their families.
Customer Satisfaction Index Rankings
(Based on a 1,000-point scale)
|Insurer||Index score||JDPower.com Power Circle Ratings|
|California State Automobile Association||839||3|
|Automobile Club of Southern California||824||3|
|Automobile Club Group||821||2|
|**New Jersey Manufacturers Insurance||885||5|
*USAA is an insurance provider open only to U.S. military personnel and their families and therefore is not included in the rankings.
**New Jersey Manufacturers Insurance Co. is an insurance provider open only to New Jersey Business & Industry Association members, State of New Jersey employees, NJM’s previously insured drivers, and/or previous auto/homeowner policyholders and therefore is not included in the rankings.
Included in the study but not ranked due to small sample size is GMAC.
About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company providing forecasting, performance improvement, social media and customer satisfaction insights and solutions. The company’s quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visitJDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.
About The McGraw-Hill Companies
McGraw-Hill is a leading global financial information and education company that helps professionals and students succeed in the Knowledge Economy. Leading brands include Standard & Poor’s, S&P Capital IQ, S&P Indices, Platts energy information services and McGraw-Hill Education. With sales of $6.2 billion in 2010, the Corporation has approximately 21,000 employees across more than 280 offices in 40 countries. On September 12, 2011, the Corporation announced its intention to separate into two public companies – McGraw-Hill Markets (working name), primarily focused on global capital and commodities markets and McGraw-Hill Education focused on digital learning and education services worldwide. Additional information is available athttp://www.mcgraw-hill.com/.