Auto insurance repair times down but costs up, J.D. Power finds

Insurance industry faces major challenges in keeping policyholders happy and loyal, with rising costs and repair times both troublesome. Image (c) ConsumerAffairs

Claims process "the moment of truth" for consumers and their insurers

Auto insurers have been facing challenges since the pandemic, particularly with higher repair costs and longer repair times. But things may be looking up, at least as far as repair times go.

According to the J.D. Power 2024 U.S. Auto Claims Satisfaction Study, repair times have improved, dropping from an average of 23.9 days to 18.9 days later in the study period.

On the downside, repair costs have increased by 26% in the past two years, leading to a 15% rise in premiums.

“The claims process is the moment of truth for auto insurance customers, so when they experience rate increases and then have a claim with longer-than-expected repair times and other inconveniences, their overall trust in the brand is greatly diminished,” said Mark Garrett, director of global insurance intelligence at J.D. Power. 

"However, premium increases have created a new challenge for insurers as trust is eroding and affecting the way customers view their claims. There are still many challenges the industry needs to navigate to maintain customer loyalty,” Garrett said.

These rising costs have hurt customer satisfaction, especially for those who experienced premium increases before making a claim. Trust in insurers is dropping, with 80% of customers who had bad claims experiences saying they’ve already switched or plan to switch providers.

While digital claims processing is improving customer satisfaction, older generations still prefer to handle claims through more traditional methods like phone calls. Good communication, especially making it easy for customers to reach insurer representatives, remains crucial to a positive claims experience. 

Insurance companies ranked

The study ranked NJM Insurance Co. highest for overall customer satisfaction, with a score of 782. Amica (746) ranks second and Erie Insurance (733) ranks third.

The U.S. Auto Claims Satisfaction Study was redesigned for 2024. Scores are not comparable year over year with previous studies. The 2024 study is based on responses from 9,725 auto insurance customers who settled a claim within the past nine months prior to participating in the survey.

It measures customer experience across eight core dimensions (in order of importance): trust; fairness of settlement; time to settle claim; people; communication; ease of resolving claim; ease of starting claim; and digital channels. The study was fielded from October 2023 through August 2024.

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