Auto Insurance Customer Satisfaction At All-Time High

Overall customer satisfaction with auto insurance companies has reached an all-time high, led primarily by increases in satisfaction with policy offerings and billing and payment, according to the J.D. Power and Associates 2012 U.S. Auto Insurance Study.

Overall satisfaction with auto insurers reached 804 on a 1,000-point scale, up 14 points from 2011 and the highest since the study was launched in 2000.

That’s the headline of this year’s findings. However, J.D. Power and Associates’ analysis also provides some useful intelligence about how well customers tolerate rate hikes.

Basically, customers that are notified in advance and given options tolerate rate hikes well.

Among auto insurance customers who were notified prior to a rate increase and had a discussion with their insurer, satisfaction is 807. This compares with a satisfaction score of 746 among those customers who were not notified of the rate increase prior to the renewal notice.

The study finds that 20 percent of customers 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 increase by at least $50 is 735, compared with 797 among those experiencing an increase of less than $50.

A press release quotes Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates:

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. 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.†

The study is based on nearly 35,000 responses from auto insurance customers and was fielded between March and May 2012.

Check out I.I.I. facts and statistics on auto insurance: costs and expenditures.

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