Insurance

Half of all drivers don’t have much trust in their car insurance company

  • June 17, 2024
  • 3 min read
Half of all drivers don’t have much trust in their car insurance company

A recent survey conducted by J.D. Power focused on the satisfaction and trust levels of U.S. car owners towards insurance companies. The study, known as the 2024 U.S. Auto Insurance Study, revealed that despite a significant 11.2 percent increase in insurance premium rates in the past year, customers who have a high level of trust in their insurers also express satisfaction with them.

However, it is important to note that these satisfied customers are in the minority. According to the survey, only 15 percent of drivers have high levels of trust in their auto insurers, while 34 percent have moderate levels of trust and a concerning 51 percent have little trust in their insurers.

The concept of “trust” in this context was not explicitly defined in the study. However, it can be inferred that trust relates to companies that deliver on their promises when needed. This could involve aspects such as honesty and fairness in handling claims. Additionally, in a time where insurance premiums are skyrocketing, trust also encompasses customers who understand and accept the reasons behind these increases.

Breanne Armstrong, the director of global insurance intelligence at J.D. Power, acknowledged the challenges that auto insurers are currently facing. With repair costs on the rise and a growing number of vehicles being declared total write-offs after collisions, insurers are struggling to remain profitable despite passing on substantial price hikes to their customers.

The survey findings also indicated that trust levels varied by region, with regions experiencing higher insurer rate increases showing lower trust scores. For instance, Florida, where rate increases are prevalent, had the highest percentage of customers (55 percent) with low levels of trust.

Interestingly, customers who reported the highest level of trust in their insurer had an average overall satisfaction score of 917 out of 1,000 points. This was significantly higher (426 points) than customers who had the lowest level of trust. However, it is important to note that this high level of trust was only present among a small minority of customers.

The U.S. Auto Insurance Study, now in its 25th year, underwent redesign for the 2024 edition. It evaluates customer satisfaction with auto insurers across seven categories, including trust, price for coverage, customer service, ease of doing business, product offerings, problem resolution, and digital channels.

The study analyzed 11 geographic regions and identified the insurance companies with the highest cumulative satisfaction scores in each region. For example, in California, the Auto Club of Southern CA (AAA) scored 684 points, while Shelter in the Central region scored 677 points for the fourth consecutive year.

Furthermore, the study also examined satisfaction levels among customers of usage-based insurance, also known as “pay as you drive” insurance. This category received a notably higher satisfaction score of 842.

The survey was based on responses from 41,242 customers collected between August 2023 and April 2024. Detailed rankings for the 12 surveyed categories and regions can be found on the J.D. Power website.

Overall, the survey highlights the importance of trust in the relationship between auto insurers and customers. Building trust through honest and fair practices, clear communication, and meeting customer expectations can lead to higher satisfaction levels, even in a challenging market environment characterized by rising costs and premiums.

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SUV Bazar

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