Car Insurance Companies Need To Improve in a Key Area
Brandon Moore
Oct 14, 2021 · 4 min read
Once a person chooses a car insurance policy, they likely won't think about it too much unless they need to file a claim. This isn't always a bad thing, but many people could benefit from taking a second look at their policy to see if there is something better out there for them.
A recent report released by J.D. Power shows that auto insurance customer satisfaction has flattened out, largely thanks to one key issue: communication.
J.D. Power's auto insurance study
Insurance companies need to communicate with their customers better | Twenty20
J.D. Power's report is largely focused on the fact that customer satisfaction has remained relatively unchanged in the last year. This may have come as a surprise to some car insurance experts, as the general trend has been higher customer satisfaction year after year for four consecutive years. Not this time.
Auto insurance companies tried to boost their brand perception, and in turn customer satisfaction, by providing major relief throughout the COVID-19 pandemic. However, only half of auto insurance customers had any awareness of this extra effort on the part of their insurance companies.
One positive note from the study is that auto insurance prices have gone down over the past year, but many people failed to notice this silver lining due to dissatisfaction with the communication of their auto insurance companies.
Communication scores have plummeted
This report talks in-depth about the significant declines seen in customer satisfaction relating to their auto insurance's communication. Overall, customer satisfaction with chat and email communication dropped by a whopping 12 points.
Call center satisfaction saw a less severe drop of five points, and auto insurance websites and local insurance agent satisfaction dropped by three points and one point, respectively.
This study should serve as a major wake-up call for auto insurance companies, as communication is one of the most important aspects of the entire business. People purchase auto insurance with the hope that they won't need to file any claims, but when they do get into an accident, they expect to be reasonably supported and assisted by the company they pay significant dollars to every month for that very service.
Car accidents are a major stressor, and waiting days or weeks to hear back from insurers who provide less-than-helpful responses is disappointing for customers to say the least. United Policyholders has a guide for communicating with your insurance company that some may find helpful, though we hope that auto insurers work diligently to make it easier to communicate with their staff moving forward.
Price is also a top deciding factor for customers
Communication is important, but the price will always be a major deciding factor for customers when choosing an auto insurance company.
The J.D. Power study also found that people don't feel loyal enough to their auto insurance companies to decline a small discount from another agency. Almost half of those surveyed said they are ready to switch insurance companies if they could save $200 or less by doing so.
On top of that, over half of those who switched companies recently do so because of a premium increase of $200 or less with their previous company. Perhaps if communication issues among auto insurers got sorted out, people would be less tempted to switch by a relatively modest savings offer from another company.
If auto insurers want to keep their customers’ business, they should take this seriously and attempt to strike a balance between effective communication and keeping their rates as affordable as possible.
Fortunately, consumers don't have to spend hours doing all the dirty work of sorting through insurance premiums like they used to. Now, artificial intelligence can find the best prices for you in as little as a few minutes with a couple of taps on your smartphone. If you're ready to explore other car insurance options, give Jerry a try today.
