Study: Lower Satisfaction Among Total Loss Auto Claimants

Auto insurance claimants who incur a total loss are notably less satisfied with the claims experience than claimants who incur a repairable vehicle claim, according to the J.D. Power and Associates 2011 U.S. Auto Claims Satisfaction Study(SM) released today.

The study was based on more than 11,500 responses from auto insurance customers who filed a claim within the past 12 months. The study excludes claimants whose vehicle only incurred glass/windshield damage or was stolen, or who only filed roadside assistance claims.

The study measured claimant satisfaction with the claims experience for auto physical damage loss. Depending on the complexity of a claim, the claimant may experience some or all of the following factors 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 both total loss and repair claimants.

Satisfaction averages 811 on a 1,000-point scale among claimants with a total loss—42 points lower than among those whose vehicle is repaired. This gap is largely due to a lack of satisfaction with the settlement among total loss claimants, with approximately one-half of these claimants citing the settlement they received wasn’t enough to replace their totaled vehicle with a similar make/model vehicle.

Insurers can deliver a satisfying experience by addressing three primary needs throughout the claims process:

Communication—Insurers must not only be available when claimants have questions, but must also make an effort to clearly explain the claims process, follow up in a timely manner and keep claimants informed throughout the process.

Speed—Insurers must quickly move the claim along from first notice of loss, to the appraisal, to communicating settlement amounts and ultimately paying claimants. Currently, total loss claimants report having to wait an average of four days to receive a settlement offer following damage appraisal.

Fairness—Claimants want to be treated fairly regarding the settlement and avoid surprises during the process, whether caused by unexpected out-of-pocket expenses or not comprehending their policy coverage in a claims situation.

Auto-Owners Insurance ranked highest in overall satisfaction with the claims experience for a fourth consecutive year, achieving a score of 890. State Farm followed in the rankings with a score of 878, improving considerably from 2010. Amica Mutual ranked third with 865. New Jersey Manufacturers Insurance Company and USAA also achieve high levels of customer satisfaction, although they are not included in the rankings due to the closed nature of their respective memberships.

Source: J.D. Powers and Associates