Report: Auto Claims Satisfaction Chilled in Winter

Auto insurance policyholders are less happy with the claims process, according to a new survey from J.D. Power and Associates that found overall satisfaction levels dipped compared with findings published early this year.

J.D. Power attributed much of the dip — from 861 in January to 850 in the latest study — to wintertime dissatisfaction that is normally amped up because of the holiday season. The study was based on more than 2,800 responses from auto insurance claimants that were obtained between November and December 2012.

With policyholders especially perturbed by out-of-pocket expense increases during the holidays, J.D. Power said the fact that its latest study also found an average $30 jump in out-of-pocket costs was likely a contributor to the drop in overall satisfaction.

“That’s a meaningful increase,” Jeremy Bowler, J.D. Power’s senior director of the insurance practice, said in an interview with Online Auto Insurance News (OAIN).

The firm measured expenses for what is called “material damage” in the industry, according to Bowler, like the cost of deductibles and car rentals. Car rental costs make up the majority of out-of-pocket expenses, he said.
Bowler also said that the collision industry sees different claims patterns during the winter that can exacerbate dissastifaction among drivers.

“There’s a clumping phenomenon that occurs during winter when you might have groups of claims come at once because the road was iced and some cars crashed,” he told OAIN. “But in the summer months, claims are spread out more evenly.”

Such clumping of claims may be leading to claimants waiting longer to get appraisals. The average wait time for an appraisal was 3.3 days in the firm’s latest analysis, up from 2.9 days in the previous study period.

Also, a comparison of auto insurance settlement periods showed the process is taking a day longer on average than in the previous study period and is now 14.9 days, according to the firm.

“The holiday season puts an additional strain on the pocketbooks of Americans, and it certainly resonates with other data I’ve seen about consumer sentiments and savings behavior,” Bowler said. “So with higher expenses and longer wait times, you can see how dissatisfaction can snowball.”

In its study, J.D. Power also offered a breakdown of the length of repair processes.

When comparing repair times for shops that are included in insurers’ networks of repair shops to those outside of the networks, the former got claimants’ cars back to them an average 1.3 days faster.

Bowler said that repair programs that most major insurance carriers offer are reliable because of body shops’ relationship with those major companies. He highlighted Progressive’s Concierge Experience, which offers a preset list of “service centers.”

“They manage the workload with a group of repairers so you’re not really bringing the car to a repair shop but the concierge service itself,” he said. “Inherently, Progressive has buying power, which can be said of any major insurer, so you can easily picture that the body shops are afraid of pissing off an insurer that sends so much business their way.”

In addition, the study found that repairs at a dealership take nearly a day longer to complete, averaging 11.9 days, than repairs at an independent or chain repairer.

Many customers take their cars to dealerships because they are familiar with them after a vehicle purchase, according to Bowler. However, familiarity with a car buyer may not mean much when it comes to car repairs.

“Repairs are not their primary business, so since the general manager of a dealership may want every part of that dealership functioning at a high level, you’re another person in the line if you don’t have any pull and want repairs,” he said.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for Patch.com and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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