Recent Stats Show Auto Insurance Consumer Satisfaction Declining

customer satisfaction

People are becoming increasingly dissatisfied with the car insurance experience. Doesn’t matter whether they’re hunting for auto insurance quotes in Goodlettsville TN or searching for coverage clear across the country in Fresno CA—there’s a trend of declining satisfaction among insurance shoppers, and today, we’re going to take a closer look.

In a recent study, JD Power polled some 37,000 insurance policyholders between January and April of 2022, and found that, as insurers have been raising rates in the face of an increasing number of collisions, surging vehicle costs, and ballooning repair costs, customer satisfaction is starting to wane, and having rippling effects throughout the industry:

“Overall customer satisfaction with auto insurance providers is 834 (on a 1,000-point scale), down from 835 a year ago. However, customer satisfaction with the price of their policies is 769, down a significant 5 points from 2021.”

The slump has hit direct insurers particularly hard:

“The overall satisfaction score for the direct channel is 860, which puts it behind the exclusive agent channel (866) for the first time in five years. The independent agent channel climbed to 854 from 848 a year ago, but still lags direct and exclusive agent channels in overall customer satisfaction.”

The study found that the regions hit hardest by this breakdown in satisfaction included New York State, and the “Central Region,” which consists of Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, and Oklahoma. Four regions—California, Texas, the Southeast, and the Southwest—actually saw an increase in overall satisfaction ratings, while Florida and the North Central region saw little variation in satisfaction.

As for the breakdown of insurance satisfaction by provider, State Farm, Farmers, and Liberty Mutual held the highest ranking among large insurers, while Hartford, Erie, and Amica Mutual held the highest rankings amongst mid-sized insurers.

Because of the widespread dissatisfaction, though, consumers are starting to shop around for new policies. Roughly 64% of those who are shopping around because their costs went up reported increases greater than 11% on their total insurance costs. Older customers have shown to be the most sensitive to these increases in price, but Boomers aren’t the only ones who are jumping ship for new insurers. Gen X, Millennials, and Gen Z are all searching for something new, and hoping that it will be more manageable for their budgets.

Not all the news is bleak, however. Among the dissatisfaction, auto insurers were able to find a few strategies to maintain a level of customer retention. One method that seemed to have positive effects for insurers was being transparent and giving their customers plenty of advanced warning about those price increases. “Proactive” measures, says JD Power, had a rather significant sway over how customers took the news:

“In the past year, 59% of customers experiencing a price increase were notified in advance by their insurer—up from 44% in 2016—and overall satisfaction scores are 37 points higher, on average, among those pre-notified customers.”

So, bottom line, customer satisfaction is down, in general, but auto insurers who were able to adapt and stay upfront with their clients tended to have more satisfied customers in comparison. It remains to be seen if or when the price hikes might abate, and what effect that may have on the auto insurance industry next.