I have heard more complaints on insurance companies this year than ever in my life. Like most everyone, including me, having to absorb higher rates in spite of not making any claims. As you’ll learn below, over half of those surveyed say they have little trust in the auto insurance provider. Trust, not premiums, seem to be the big influencer according to this study.
-Jerry Reynolds, Host of the Car Pro Show
Don't look for sky-high car insurance premiums to level off anytime soon. This, according to the recently released J.D. Power 2024 U.S. Auto Insurance Study. It found that auto insurance rates are up 11.2% on average during the past year— with insurers still losing an average of five cents on every dollar of premium they collect. J.D. Power says according to its study, these rate increases do not necessarily erode customer satisfaction with auto insurers. Researchers say when customers have a high level of trust in their insurer, customer satisfaction and brand advocacy increase considerably, even in the face of rate increases. However, according to the study, slightly more than half (51%) of customers say they have little trust in their auto insurer.
“Auto insurers are in a tough position right now,” said Breanne Armstrong, director of global insurance intelligence at J.D. Power. “With repair costs still rising—and with more than 20% of vehicles involved in collisions now considered total write-offs—insurers are still losing money, despite passing along huge price increases to their customers. What’s interesting in J.D. Power data is that even though high premiums negatively affect customer satisfaction, those negative influences can be offset by high levels of trust that insurers will come through when they are needed.”
Here are some of the 2024 study's key findings:
- Trust has huge influence on customer satisfaction and brand loyalty: The average overall satisfaction score among auto insurance customers with the highest level of trust in their insurer is 917 (on a 1,000-point scale), which is 426 points higher than among those who have the lowest level of trust in their insurer. Similarly, 90% of those in the high-trust category say they are likely to renew their policy with the same insurer vs. just 30% among those in the low-trust category.
- Most insurers miss the mark on trust: Slightly more than half (51%) of customers fall into the low-trust category, while 15% have high levels of trust and 34% have mid-levels of trust.
- Trust varies by region; Florida scores lowest: The lowest trust scores are in regions with the largest proportion of insurer-initiated rate increases. Florida, where the incidence of rate increases is highest, also has the highest percentage of customers (55%) with low levels of trust.
- Managing expectations around rate increases is key component to building trust: The average trust score among customers who experience an insurer-initiated increase—but who fully understand the reasons for that increase and expect the increase—is 735. That is just one point lower than the average trust score among customers who experienced an insurer-initiated rate decrease (736).
Highest Ranking Insurers By Region
The J.D. Power study measures customer satisfaction with auto insurance in 11 geographic regions. A separate category addresses usage-based insurance (UBI), along with diagnostics that influence UBI participants’ experience with their insurer’s usage-based auto products.
Here are the study's highest-ranking auto insurers and scores by region:
California: Auto Club of Southern CA (AAA) (684)
Central: Shelter (677) (for a fourth consecutive year)
Florida: Auto-Owners Insurance (654)
Mid-Atlantic: Erie Insurance (713) (for a third consecutive year)
New England: Amica (709)
New York: Travelers (667)
North Central: Erie Insurance (710) (for a fourth consecutive year)
Northwest: PEMCO Insurance (666)
Southeast: Alfa Insurance (693)
Southwest: CSAA Insurance Group (AAA) (683)
Texas: Texas Farm Bureau (686)
Usage-Based Insurance (UBI): Nationwide (842)
About the Study
The U.S. Auto Insurance Study, now in its 25th year, was redesigned for 2024. It measures customer satisfaction with auto insurers based on performance in seven core dimensions on a poor-to-perfect rating scale. Individual dimensions measured are (in order of importance): level of trust; price for coverage; people; ease of doing business; product/coverage offerings; problem resolution; and digital channels. This year’s study is based on responses from 41,242 auto insurance customers and was fielded from August 2023 through April 2024.
Photo Credit: New Africa/Shutterstock.com.