Rising auto insurance rates causes customer satisfaction to fall

Auto insurance rates - Insurance Company

A new JD Power study showed that drivers are unhappy with their insurers over climbing premiums.

A new JD Power study has shown that motorists’ satisfaction with their insurers is falling as they watch their auto insurance rates rise.

JD Power published the results of their 2022 Insurance Shopping Study showing discontent among drivers.

The study showed that auto insurance rate hikes have been driven by a 41 percent rise in the price of used cars. This has pushed vehicle repair and replacement costs skyward and has sent insurers to raise premiums.

Auto insurance rates - Premiums rising

“A perfect storm of record-high replacement costs, increased frequency and severity of collisions and an economic outlook that suggests this situation won’t change anytime soon is forcing a major industry disruption,” said JD Power Executive Managing Director of P&C Insurance Intelligence Marty Ellingsworth. “In the near term, that disruption is manifesting itself in very low customer satisfaction with price and high rates of new policy shopping.”

This could send many drivers to adopt usage-based policies to control their auto insurance rates.

Ellingsworth went on to say that the rising premiums for traditional policies might “be the catalyst to significant adoption of usage-based insurance.” He added that it could become the solution insurers have been waiting for to solidify customer loyalty within the current economy.

The study results also showed that due to the rising premiums drivers are facing, they are frequently looking to the competition to find lower rates. This has caused activity in shopping for new policies to suddenly take off.

The average overall score for customer satisfaction among those seeking new quotes for their car policies was 862 (out of a possible 1,000), said the JD Power study. This represented a drop of six points when compared to the same figures from 2021of the nine largest car insurers, six experienced reduced purchase experience satisfaction in 2022. The same could be said for six of the last eleven mid-sized insurers.

Auto insurance rates have sent drivers to shop for new policies as of March and April of this year. Before the higher premiums were put into place, the percentage of drivers looking elsewhere had been falling.

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