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Auto-Owners Tops J.D. Power Survey on Auto Insurance Claims Satisfaction

Oct. 30, 2015
Auto Insurance, Insurance
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A regional insurance company has edged out larger, national competitors in a new study from J.D. Power on the best car insurers for customer satisfaction.

Auto-Owners Insurance, based in Lansing, Michigan, took the top spot in the 2015 U.S. Auto Claims Satisfaction Study from the consumer research group. The insurer sells coverage in 26 states, mostly in the Midwest and Southeast. Amica Mutual, which operates in all 50 states, was the runner-up.

J.D. Power’s study measures whether consumers are satisfied with the way their auto insurance claims are handled. Well-known national companies such as State Farm, The Hartford, Amica, Travelers and American Family usually end up in the top slots, according to Mark Garrett, director of insurance industry analytics for J.D. Power. However, Auto-Owners has always been a solid contender and finished second in last year’s survey.

Auto-Owners Insurance handles customers’ claims in a unique way: Three-quarters of them are taken care of by local Auto-Owners agents rather than the customer going through centralized call centers. Having the agent who sold the policy start the claims process engenders a feeling of trust that results in higher customer satisfaction marks, Garrett tells NerdWallet.

[Compare car insurance quotes through NerdWallet’s Car Insurance Comparison Tool.]

To measure satisfaction, J.D. Power surveyed nearly 11,500 consumers who had auto insurance claims settled in the previous six months. The consumers may have had experience in some or all of the following categories: first notice of loss (the initial contact for the claim), service interaction, appraisal, repair process, rental experience and settlement. Satisfaction was measured on a 1,000-point scale.

Among the two dozen companies included in the study, only Auto-Owners Insurance (893 points) and Amica Mutual (885 points) received five “power circles,” the J.D. Power version of stars. A notable change in this year’s study, Garrett says, is State Farm’s fall out of the top five. The insurer came in third in 2014 but dropped to 11th in the 2015 study.

Here are the companies that scored above the industry average for overall claims satisfaction.

Satisfaction with auto insurance claims, 2015
Rank Name of company Score (out of 1,000) Power circles (out of five) Description Get a quote
1 Auto-Owners 893 5 Among the best
2 Amica Mutual 885 5 Among the best
3 Auto Club of Southern California Insurance Group 871 4 Better than most
4 The Hartford 870 4 Better than most
5 Nationwide 866 4 Better than most
6 Erie Insurance 862 3 About average
7 Allstate 861 3 About average
8 American Family 859 3 About average
8 Farmers 859 3 About average
8 Safeco 859 3 About average
11 State Farm 858 3 About average
Source: J.D. Power. The industry average score was 857.

The other companies included in the study were:

  • Geico (854)
  • Liberty Mutual (854)
  • Progressive (853)
  • Country Financial (851)
  • Mercury (851)
  • Travelers (851)
  • CSAA Insurance Group (848)
  • 21st Century (843)
  • The Hanover (835)
  • MetLife (833)
  • Automobile Club Group (831)
  • Esurance (825)
  • MAPFRE-Commerce Insurance (804)

Millennials disgruntled

The survey found that millennials (defined by J.D. Power as those born between 1977 and 1994) who made recent auto collision claims were less satisfied with the process than older car insurance customers. They are also twice as likely as any other demographic to change insurers if they aren’t satisfied with the service. But their dissatisfaction may stem from being relatively inexperienced with the process and not fully understanding auto insurance, Garrett says.

Millennials tend to buy cheap car insurance policies, choosing a high deductible and minimal coverage with few frills. That saves money upfront but can cause financial stress in the event of an accident, when “they have to come up with a $1,000 deductible plus rent a car,” Garrett says.

They’re also likely to be surprised at how long the insurance claims process lasts, especially because it can take a week or more for car parts to be ordered and repairs to be completed.

Satisfaction through knowledge

Consumers need to make sure they’re buying the right coverage, Garrett says, and insurers need to do a better job at educating customers about what’s included in their policies.

Don’t be embarrassed to ask for explanations about the best auto insurance coverage based on your circumstances and the age of your car.

If you have concerns about the way a claim was handled, say so — almost all the companies in the study request feedback from customers. “They’re actively looking at that data,” Garrett says.

NerdWallet’s auto insurance comparison tool  can make it easy to find the best prices.

Donna Freedman is a former contributing writer for NerdWallet.

Image via iStock.