Auto Trust Factor

The trust factor is critical in the insurance purchasing process. When customers trust their insurance provider they feel more satisfied with the insurance buying process even in the face of rising rates.

That’s according to the J.D. Power 2024 U.S. Auto Insurance Study, which found that rate increases do not necessarily erode customer satisfaction when it comes to auto insurance. The consumer intelligence company reported that when customers have a high level of trust in their insurer, customer satisfaction and brand advocacy increase considerably, even in the face of rate increases — which have been more than 11% over the last year.

“Auto insurers are in a tough position right now,” Breanne Armstrong, director of global insurance intelligence at J.D. Power, said in a press release. “With repair costs still rising — and with more than 20% of vehicles involved in collisions now considered total write-offs — insurers are still losing money, despite passing along huge price increases to their customers. What’s interesting in J.D. Power data is that even though high premiums negatively affect customer satisfaction, those negative influences can be offset by high levels of trust that insurers will come through when they are needed.”

However, the study found 51% of customers say they have little trust in their auto insurer. Fifteen percent of customers have high levels of trust in their insurance company, and 34% have mid-levels of trust, according to the report.

J.D. Power used a 1,000-point scale to determine overall satisfaction scores for insurers across the United States. This year’s study is based on responses from 41,242 auto insurance customers and was conducted from August 2023 through April 2024.

Individual dimensions measured in the study are listed below in order of importance.

• Level of trust
• Price for coverage
• People
• Ease of doing business
• Product and coverage offerings
• Problem resolution
• Digital channels

“The average trust score among customers who experience an insurer-initiated increase — but who fully understand the reasons for that increase and expect the increase — is 735,” the press release said. “That is just one point lower than the average trust score among customers who experienced an insurer-initiated rate decrease (736).

Erie Insurance was named the highest-ranked insurer in the Mid-Atlantic and North Central U.S. Auto Club of Southern California (AAA) claimed that title in California, and Auto-Owners Insurance was the top-ranked insurance company in Florida.