J.D. Power Study: Auto insurance customer satisfaction on the decline

New study finds that drivers are becoming increasingly dissatisfied with the overall insurance claims process.

A new study performed by J.D. Power and Associates has concluded that the overall level of customer satisfaction in relation to auto claims is slowly declining. The news marks the first decline in three calendar quarters, according to J.D. Power and Associates 2012 U.S. Auto Claims Satisfaction Study, released on Wednesday. Specifically, total customer satisfaction declined 13 points to 842. The new study found that the most significant drop in customer approval occurred in first notice of loss (-19 points), which is when the customer initially notifies the insurance provider of damage to their vehicle. Other notable areas of disapproval are service interaction (-16 points); appraisal (-16 points); and repairs (-15 points).

Although auto insurance companies may appear to be the lone culprit, vehicle owners are not entirely guilt free. The average repair cycle has increased from 15.0 days to 15.8 days from the fourth quarter of 2011 to the first quarter of 2012, but customers have been waiting about one-half day longer to bring their vehicle to the body shop.

"Forty-seven percent of claimants delayed dropping off their vehicle at the body shop to wait for a more convenient time, and 20 percent indicated waiting for weekends or holidays," said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. "However, these customers tend to also have lower satisfaction as a result of having to wait an extra day and a half, on average, to get their vehicle to the shop compared to results from the prior quarter. This suggests insurers need to do a better job of managing customer expectations for claims processing and vehicle repair times."

Bowler went on to add: "Repair times have also increased slightly from the last quarter. This, in addition to customers waiting longer for a more convenient time, or the weekend, to bring their vehicle to the repair shop, has contributed to the overall lower satisfaction scores."

The study looked at all facets of customer satisfaction in terms of the total claims process from start to finish. The study measured first notice of loss, service interaction, appraisal, repair process, rental experience and settlement. Not surprisingly, claimants stated that settlement was the most important factor in their overall satisfaction. J.D. Power and Associates comprehensive research was based on data collected from over 3,700 auto insurance customers who filed claims within the last 6 months.

Located in Westlake Village, Calif., J.D. Power and Associates is global marketing information service that provides social media and customer satisfaction insight and solutions. The company is best recognized for its customer satisfaction research on new-car quality and long-term dependability.

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