Auto Claims Satisfaction Remains Stable Despite Decline in Total Loss Satisfaction

Satisfaction with the auto claims experience held steady in the second quarter of 2013, compared with the first quarter. Small improvements in satisfaction with repairable claims were offset by significant declines in satisfaction among total loss claimants, according to the J.D. Power 2013 Auto Claims Satisfaction Study released this week.

Te declines may be due to the impact of more claims filed in the Mid-Atlantic region after damages from Superstorm Sandy at the end of October 2012 and a powerful nor’easter storm in February 2013.

“While overall auto claim satisfaction is up 2 points, and satisfaction in four of the six factors[1] is also up from Wave 2, satisfaction with the appraisal process among total loss claimants declines by 25 points,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power.

“For total loss vehicles, satisfaction with the claims process has declined by a significant 57 points in the Mid-Atlantic region, which was devastated by major storm events. In that region, satisfaction with the appraisal process declines by 71 points, and satisfaction with the settlement process declines by 76 points,” said Bowler.

The Wave 3 study finds that claimants wait an average of 2.8 days for an insurance appraisal of repairable vehicles, which is nearly the same as in Wave 2 (3.1 days). However, the appraisal process for total loss vehicles takes longer than in Wave 2—averaging 4.8 days, up from 4.2 days.

Further, it takes an average of 5.3 days in Wave 3 to provide claims settlement terms for vehicles that are deemed repairable, which is slightly shorter than 5.8 days in Wave 2. However, the time it takes to provide settlement terms for total loss claims has risen in Wave 3 to an average of 12.3 days from 10.5 days in Wave 2.

In addition, receiving settlement payments takes considerably longer for total loss claims in Wave 3 than in Wave 2. In Wave 3, receiving a settlement averages 20.9 days, which is up by 4.3 days from 16.6 days in Wave 2. The time it takes to receive a settlement payment for repairable claims remains virtually unchanged—14.5 days in Wave 3, compared with 14.1 days in Wave 2.

“Our findings highlight how important it is for insurers to efficiently manage their customers through the appraisal process. There are more than 70 percent of auto insurance claimants who had some form of interaction with their insurer related to an appraisal. Among these claimants, overall satisfaction is 30 points higher than among those who did not interact with their insurer or agent,” said Bowler.

The 2013 U.S. Auto Claims Satisfaction Study—Wave 3 is based on 3,009 responses from auto insurance customers who settled a claim within the past 6 months. The study excludes claimants whose vehicle only incurred glass/windshield damage or was stolen, or who only filed roadside assistance claims. Wave 3 of the study was fielded between April and mid-June 2013.

Source: J.D. Power and Associates