According to the J.D. Power 2017 U.S. Auto Insurance Study, the number of customers receiving an annual rate increase of more than $200 per vehicle has more than doubled during the past four years. This has had a considerable negative effect on customer satisfaction, and creates a tense marketplace for agents and brokers nationally. The thought of price shopping consumers scares away many agents from marketing to these types of consumers. Price satisfaction scores among customers who receive a price increase of $200 or more are, on average, 188 points lower (on a 1,000-point scale) than among customers who experience price increases of just $25 or less.
Customer satisfaction with the price of auto insurance is down, largely as a result of rate increases for 26% of customers and increased frequency and severity of collisions,
However, customer satisfaction with other areas of the overall customer experience have improved, according to the study. What these findings show us is that while many consumers may be price sensitive, the overall customer experience can often times outweigh the price tag.
When consumers are informed that price increases are a common occurrence, they are likely to get over the price shopping and work with someone they can trust and rely on. Auto insurance is quickly becoming more about the customer experience than it is about price.
The study shows that overall satisfaction with auto insurance is improving, while overall satisfaction with price is declining. Overall customer satisfaction with U.S. auto insurers improves in 2017 and now stands at an historically high level: 819. However, satisfaction scores in the price factor have declined for a second consecutive year.
Customer satisfaction with auto insurance is largely correlative to the size of recent premium increases. Satisfaction scores average 726 among customers who report premium increases of $25 or less. Among those who report an increase of $200 or more, satisfaction declines by 188 points, to an average of 538. Overall national price satisfaction shows a decline of just one point.
Satisfaction among customers who received a price increase averages 645 compared with 768 among customers without an increase. However, according to the study, when carriers notify customers of a price increase in advance of the change, provide helpful information on customers’ bills, and when customers say they completely understand their policy, price satisfaction averages 755 among customers who have received an increase in premiums.
Following are the highest-ranked auto insurance brands by 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
Based on the study, J.D. Power offers the following tips:
- If you’re a safe driver who doesn’t rack up a lot of miles, look into usage-based insurance programs.
- If you experience an increase in your premium, work with your carrier to see if a less expensive policy would work for you.
- Meet with your insurance provider once a year to discuss any upcoming changes in your premium, and to stay informed of any new or modified insurance products.
What are your thoughts? Have you noticed a change in your client base due to year over year price increases? We want to hear from you!
About the Study
The 2017 U.S. Auto Insurance Study examines customer satisfaction in five factors (in order of importance): interaction; policy offerings; price; billing process and policy information; and claims. The study is based on responses from 45,624 auto insurance customers, and was fielded in February-April 2017.