J.D. Power: Auto Insurance Satisfaction Reaches All-Time High

Overall customer satisfaction with auto insurance companies has reached an all-time high, according to the Westlake Village, Calif.-based J.D. Power and Associates’ 2012 U.S. Auto Insurance Study.

The satisfaction rate was driven primarily by increases in satisfaction with policy offerings, billing and payment practices, the study shows.

The study measures customer satisfaction with auto insurance companies across five factors: interaction; price; policy offerings; billing and payment; and claims.

Overall satisfaction with auto insurance companies is 804 (on a 1,000-point scale), up 14 points from 2011.

Satisfaction levels in 2012 are the highest since the study was launched in 2000, according to J.D. Power.

Satisfaction increased in all factors in 2012, with significant improvements in policy offerings (+30 points) and interaction (+19 points).

Satisfaction with price is unchanged from 2011.

The study found that 20 percent of customers have experienced an insurer-initiated rate increase from 2011, with 63 percent of these customers experiencing an increase of $50 or more.

Satisfaction among customers whose premiums increased by at least $50 is 735, compared with 797 among those experiencing an increase of less than $50.

“Among customers whose insurers meet or exceed all their service expectations, modest rate increases appear to be well tolerated, provided the rate adjustment amounts to less than $50,” stated Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. “However, larger rate adjustments may trigger customers to consider shopping for a new insurer, especially those customers who are less engaged with their insurance company.”

Discussing rate increases with customers and offering options may have a positive effect on satisfaction.

Of auto insurance customers receiving a rate increase, 56 percent were not notified prior to the renewal notice, among whom satisfaction is 746.

Satisfaction among customers who were notified prior to a rate increase and had a discussion with their insurer is 807.

The study measures satisfaction with auto insurance companies in seven regions. Customer satisfaction varies from an average high of 814 in the Southeast region to a low of 784 in the Northeast region.

In the Central Region — which includes Arkansas, Oklahoma and Texas — Texas Farm Bureau (857) ranks highest among award-eligible insurers in the region, followed by State Farm (832) and GEICO (830).

The 2012 U.S. Auto Insurance Study is based on nearly 35,000 responses from auto insurance customers between March and May.