About one third of covered US consumers said they had experienced a rate increase in the last year.
Across the United States, around one in three drivers with coverage experienced a rate increase within the last year, said a new JD Power 2023 US Auto Insurance Study.
This has pushed them to look for new ways to save money on their policies that they might not have tried before.
Mainly due to the rising expense associated with covering their vehicles, customer satisfaction with this coverage fell by 12 points to 822, according to the study. This is down from 834 in 2022 (on a scale of 1,000 points). The result is that usage-based auto insurance has experienced a notable increase in enrollment.
The report showed that consumers are decreasingly satisfied with the price they are paying for the coverage they are receiving. In that category alone, satisfaction rates fell by 25 points this year. Throughout the United States, the industry raised rates by an average of 15.5 percent as insurers contend with record high loss ratios.
Customer satisfaction with auto insurance companies has been steadily falling over the last 12 months.
“Overall customer satisfaction with auto insurers has plummeted this year, as insurers and drivers come face to face with the realities of the economy,” said JD Power director of insurance intelligence Mark Garrett. “While insurers are caught between a rock and a hard place when it comes to balancing profitability with customer experience, there are several ways they can blunt the negative effects of rising costs, such as proactively offering customers UBI alternatives, clearly signaling and explaining necessary rate increases and consistently delivering on brand promises to instill trust.”
Last year, vehicle insurers lost an average of 12 cents per dollar of collected premium. This represents the worst performance they’ve experienced in over two decades.
Among policyholders who receive a bill in the mail and paid their bill in full using a credit card, almost half – 45 percent – said they’d noticed that their auto insurance premiums had gone up. Comparatively, 28 percent of those receiving their bill digitally and making automatic payments noticed an increase, said the report.
Q1: What were the key findings of the JD Power 2023 US Auto Insurance Study? A: According to the study, around one in three drivers with coverage in the United States experienced a rate increase within the last year. This has led to a decline in customer satisfaction, with the overall score falling by 12 points to 822 (out of 1000). The report also noted an increase in enrollment in usage-based auto insurance due to rising vehicle coverage costs.
Q2: How has customer satisfaction with auto insurance changed over the past year? A: Customer satisfaction with auto insurance companies has been steadily falling over the last 12 months. In the price category alone, satisfaction rates fell by 25 points this year.
Q3: How much have auto insurance rates increased on average? A: Across the United States, the auto insurance industry raised rates by an average of 15.5 percent as insurers deal with record high loss ratios.
Q4: What is usage-based auto insurance and how has its enrollment changed? A: Usage-based auto insurance takes into account the driver’s behavior and mileage, allowing safe drivers to potentially save money on their premiums. Due to rising vehicle coverage costs, usage-based auto insurance has experienced a notable increase in enrollment.
Q5: How can insurers improve customer satisfaction despite rising costs? A: According to Mark Garrett, JD Power director of insurance intelligence, insurers can improve customer satisfaction by offering customers usage-based insurance (UBI) alternatives, clearly signaling and explaining necessary rate increases, and consistently delivering on brand promises to instill trust.