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The last time Gallup polled people about the insurance industry, only 10% of respondents thought their agents were "highly honest and ethical". But a new study from J.D. Power shows that, despite such misgivings -- and despite some serious changes in the way insurance companies do business -- folks are generally happy with their insurance companies these days.
Power's 2012 U.S. Auto Claims Satisfaction Study--Wave I interviewed over 3,500 auto insurance customers in November and December 2011. To be eligible to participate, respondents had to have filed a claim within the previous six months, and the study excluded those who had only glass damage, those who used only roadside assistance, and those whose cars were stolen.
The survey asked participants to rate their insurance companies in six areas, though not all applied to every respondent: first notice of loss; service interaction; appraisal; repair process; rental experience; and settlement. Not surprisingly, Power found that "settlement" -- that is, getting the cash -- was the most important factor to consumers, no matter whether their vehicles were repaired or declared total losses.
What Power discovered was that customer ratings of insurance companies generally remained flat or ticked up slightly compared to surveys taken a few months earlier. That might not seem very newsworthy, but it is -- and for two slightly different reasons.
First, repairs are taking significantly longer. During the third quarter of 2011, the average repair took 7.8 days, but in the fourth quarter, weather-related claims caused a surge in repairs and a backlog at garages. That pushed back the wait time to 8.5 days, and yet satisfaction remained basically flat: respondents scored the repair process at 855 out of a possible 1,000, up one point from 854 in the third quarter.
Second, more agencies are changing the way that their customers file initial incident reports. Once upon a time, if you had an accident, you called your agent and she began the process of resolving it. Now, more companies ask their customers to start the ball rolling by ringing up a call center. Still, "first notice of loss" ratings skewed upward by seven points, averaging 886 during the fourth quarter of 2011.
What does say about insurance agencies? For us, it says one thing fairly loudly and clearly: insurance companies are becoming better communicators. Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates, lays it out for us: "Communication between insurance companies and their customers is vital to satisfaction during the claims process. Customers tend to be significantly more satisfied when their insurer lets them know when they can expect their vehicle to be fixed and then provides updates along the way, than are customers whose insurance company provides less communication."
In other words, insurance agencies are doing a better job at making the reporting and resolution process speedy and efficient. And when cars do go into the shop for repairs, companies are keeping their customers in the loop as to when those cars will be ready again.
To see how your insurance agency stacks up against the competition, check out the ratings at JDPower.com.