J.D. Power recently released its 2017 U.S. Auto Insurance study, which examines customer satisfaction, reported that rates increased for 26-percent of consumers this year. This, unsurprisingly, caused price satisfaction to decline, though other areas of overall customer satisfaction increased, the study noted.
According to the report, the rate increase is due to several factors: a record numbers of miles driven, an increase in collision frequency and severity, as well as claims from severe weather. These factors negatively impacted auto insurer profitability, causing rates to go up.
Here are a few of the study’s key findings:
Overall satisfaction improved while price satisfaction declined: Overall customer satisfaction with U.S. auto insurers improved and sits at a historically high level (819 on a 1,000-point scale). Despite this, price satisfaction scores declined for the second year in a row.
Size of premium increase correlated with satisfaction: Satisfaction scores averaged 726 among customers who experience premium increases of $25 or less. Among those with an increase of $200 or more, satisfaction declined by 188 points to an average of 538.
Steep Decline in Texas: While price satisfaction at the national level declined by only one point in 2017, there were wide variations in regional price satisfaction. Texas experienced the sharpest decline, down 13 points, due to catastrophic losses stemming from hail storms, on top of collision losses.
Following Texas, New York was down 10 points; the Northwest region down 9 points, and the Southwest region down 5 points.
Telematics increased customer perception of value: Usage-based insurance programs, which leverage telematics technology to set insurance premiums based on how far and how safely a customer drives, may be the great equalizer when it comes to customer perception of price. Price satisfaction scores are between 54 and 72 points higher among customers who are usage-based insurance participants, even when those participants have experienced premium increases.
The study also noted which insurance companies ranked most satisfactory, according to region.
Central: Auto-Owners Insurance
Florida: Auto-Owners Insurance
Mid-Atlantic: The Hartford
New England: Amica Mutual
New York: The Hartford
North Central: Auto-Owners Insurance
Northwest: PEMCO Insurance
Southeast: Farm Bureau Insurance – Tennessee
Southwest: The Hartford
Texas: Texas Farm Bureau