J.D. Power: Drivers happier with their auto insurance

J.D. Power and Associates has released the first data from its 2013 U.S. Auto Claims Satisfaction Study, and the news is good for auto insurance agencies: drivers in the U.S. are increasingly satisfied with their insurers.

In December 2012, Power surveyed over 3,000 auto insurance clients who had settled a claim in the previous six months. Power excluded respondents who had solely filed roadside assistance claims, as well as those whose cars had sustained damage to the glass or windshield only. The study also excluded respondents whose vehicles had been stolen, since the claims process in those cases can often require a longer settlement period. 

Power asked respondents to score their insurance company on a range of criteria (not all of which applied in every case): "first notice of loss; claim service interaction; damage appraisal; repair process; rental experience; and settlement". Respondents assigned scores in each of those areas on a scale of 0 to 1,000.

The good news is that overall satisfaction has climbed six points since 2011, to an average of 861. Power attributes the boost to increased satisfaction on the settlement front, where consumers' average score was 11 points higher than in 2011. Folks were also happier with the fairness of their settlements and the timing of those settlements.

Customers are probably happier about those settlements because they've been sped up. In fact, Power found that the average time that it took for agencies to pay out claims fell from 16.4 days in 2011 to 13.9 days in 2012. When looking solely at total-loss claims, the numbers were even better: in 2012, it took agencies 18.5 days to pay out total-loss claims, a drop of 5.1 days compared to 2011. Faster service means happier customers.

That said, there's definitely room for improvement -- particularly on the repair front. The average length of time needed for auto repairs climbed from 12.3 days in 2011 to 13.5 days in 2012. And while 91% of vehicles were fixed right the first time in 2011, in 2012 that figure slipped to 89%. Not surprisingly, satisfaction with the repair process edged down two points in 2012, resting at 862.

These problems could eventually bleed over to cast a pall over the entire claims process. Jeremy Bowler, the senior director of the insurance practice at J.D. Power and Associates, says that "While insurers have made significant progress in the past 12 months to improve the efficiency of the claims process, the repair providers have not kept pace. Failure to repair a vehicle correctly is critical to the customer experience as average satisfaction scores tumble over one hundred points for those who had to bring their vehicle back for repeat repairs."

What's remarkable to us is that overall satisfaction climbed during a period in which two natural disasters struck the U.S.: Hurricane Isaac, which hit the Gulf Coast in August 2012, and Hurricane Sandy, which slammed into the Northeast two months later. Although Power didn't comment on the number of respondents with vehicles damaged in those storms, for insurers to satisfy customers so quickly during that time -- all while setting up impromptu field offices to manage claims from victims -- seems impressive.