The latest J.D. Power 2024 U.S. Auto Claims Satisfaction Study revealed a promising reduction in average repair cycle times, dropping to 22.3 days, a five-day improvement from early 2023 figures. However, despite progress in repair times, insurance customers are increasingly dissatisfied due to rising premiums, which have increased by 15% over the past year.
“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. “In fact, 80% of auto insurance customers who have poor claims experiences have already left or say they plan to leave that carrier.
“That makes this year’s significant improvement in repair cycle times very good news for insurers and their customers,” Garrett said. “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.”
The study, which surveyed 9,725 auto insurance customers who filed claims between October 2023 and August 2024, sheds light on the importance of communication and digital processing options in improving customer satisfaction. Customers who use mobile apps for claims updates reported higher satisfaction -- scoring 775 on a 1,000-point scale -- compared to those who filed claims by phone or through an agent. However, only 13% of customers reported using fully digital channels, indicating generational differences in comfort with technology. Thirty-two percent of Boomers and Pre-Boomers, for instance, stated discomfort with entirely digital claim processes.
Rising premiums, especially those associated with claims, have significantly impacted customer trust. The study highlights a 178-point decrease in satisfaction among Boomers and Pre-Boomers following a claim-related rate increase. Additionally, 48% of respondents experienced premium increases within the past year, and nearly half of these were linked to previous claims. This demographic trend underscores a growing challenge for insurers as they balance premium adjustments with customer loyalty.
While NJM Insurance Co. achieved the highest customer satisfaction score at 782, followed by Amica at 746 and Erie Insurance at 733, the findings signal the need for industry-wide improvement. J.D. Power’s study suggests that effective communication -- through timely responses, clear updates and accessible information -- remains essential to customer satisfaction, especially as repair costs rise.
With average repair costs having risen by 26% in two years, insurers face a balancing act. Improvements in claims processing and repair cycle times are crucial steps forward, yet addressing premium increases may ultimately be key to retaining customer trust.
