J.D. Power: Auto Insurance Claims Satisfaction Drops

April 18, 2012

Customer satisfaction with the auto claims experience declined for the first time in three calendar quarters, according to the Westlake Village, Calif.-based J.D. Power and Associates 2012 U.S. Auto Claims Satisfaction Study —Wave 2 issued on Wednesday.

Overall customer satisfaction has dropped 13 points to 842, the lowest level in three quarters.

The largest driver of low scores is a 19-point decline in first notice of loss, when the customer first notifies the insurance provider of damage to their vehicle. Other factors with significant declines are service interaction (-16 points); appraisal (-16 points); and the repair process (-15 points).

“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.”

Overall, the claims repair cycle time has increased nearly one full day to 15.8 days in the first quarter of 2012 from 15 days in the fourth quarter of 2011, according to the study.

Nearly one-half of the increase is attributed to customers waiting approximately one-half day longer to bring their vehicle to the body shop once the appraisal has been conducted.

“Repair times have also increased slightly from the last quarter,” said Bowler. “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 measures customer satisfaction with the claims experience for auto physical damage loss. Depending on the complexity of the claim, a claimant may experience some or all of the following, which are measured in the study: first notice of loss; service interaction; appraisal; repair process; rental experience; and settlement. Settlement is the most important factor in overall satisfaction among repair claimants as well as total loss claimants.

The study is based on responses from more than 3,700 auto insurance customers who filed a claim within the past six months. Data for Wave 2 of the study was fielded between January and February 2012.

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