After Dip, Customer Satisfaction with Insurance Claims Rises

The latest study from J.D. Power and Associates found that customers’ happiness with their insurance-claims experience rebounded to levels seen in late 2011, following a significant dip in satisfaction levels earlier this year.

The U.S. Auto Claims Satisfaction Study from the research firm surveyed 2,600 auto insurance policyholders with an eye toward six factors assessing claims satisfaction:

— First notice of loss
— Service interaction
— Appraisal
— Repair process
— Rental experience
— Settlement

Whether or not an insurer delivers good claims service can heavily influence whether they’re considered one of the best auto insurance companies in the country. Drivers looking for a sound opinion can look to the semi-annual study if they want to know more about satisfaction with claims. State regulators also provide customer-complaint data for public viewing.

Every Factor Showed Improvement This Quarter

Compared with last quarter, overall customer satisfaction rose by 10 points to 852 on a 1,000-point scale, driven largely by higher customer satisfaction with settlements, which rose 12 points, and the repair process, which rose 10 points. In fact, all of the factors used in the study showed improvement since the firm’s last report on claims satisfaction.

Claimant satisfaction is now nearly back to what it was in the last quarter of 2011, when respondents reported a satisfaction level of 855.

The rise in satisfaction with the repair process was due to a slightly shorter time period for claims-related car repairs, which currently sits at 13.7 days between a customer’s submitting a claim and getting the car back. The first quarter of 2012 saw an average of two weeks.

The firm attributed the shortened time period to customers’ taking their cars to body shops sooner than they had before. The firm said that it is the first decrease in the time it takes to repair a car after the period had lengthened two straight quarters before this latest report.

The latest study also found that policyholders are happier paying less in out-of-pocket expenses for claims, meaning charges that include the deductible and anything above the coverage limits. The $218 average for out-of-pocket payments is $36 less than the previous quarter. About 1 out of every 5 claimants in the study had at least one out-of-pocket expense, but the number spending more than $300 fell 3 percentage points.

Settlement satisfaction plummets when customers have to pay more out of pocket, according to the study, which found an 89-point satisfaction drop-off between those who paid more than $300 beyond their deductible and those who paid only their deductible.

“The amount spent out of pocket most definitely affects the perception of fairness of a settlement, further influencing satisfaction with the overall auto claims process,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates.

Previous Report Found Big Drops in Satisfaction

The firm’s previous study about insurance claims satisfaction was released earlier this year and found drops in several factors used to determine overall scores.

Overall satisfaction in that study shrunk 13 points compared with the study before it.

In addition, satisfaction with service interaction and appraisal fell by 16 points while repair process fell by 15 points compared with the previous quarter.

A bulk of customers in that report waited longer to bring their vehicle into the shop for repairs, with almost half waiting for more convenient times and 20 percent waiting for a weekend or holiday. According to researchers, that waiting may have contributed to the drop in satisfaction with the repair process.

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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