Auto Claims Satisfaction Declines as Out-of-Pocket Expenses Rise

April 19, 2013

Satisfaction with the auto claims experience declines in early 2013, as claimants indicate paying more to have their vehicle repaired, according to the J.D. Power and Associates 2013 Auto Claims Satisfaction Study—Wave 2.

  • Overall satisfaction with the auto insurance claims process dips to 850 in Wave 2 from 861in Wave 1.
  • Claimants pay an average of $499 out of pocket for repairs, compared with $469 in 2012.
  • Vehicles repaired at a body shop in an insurer’s dedicated repair network are repaired more than one day faster than those repaired at an out-of-network shop.

car accidentOverall customer satisfaction has declined by 11 points to 850 on a 1,000-point scale, compared with Wave 1. Additionally, out-of-pocket expenses, such as the deductible and vehicle rental, have increased to an average of $499, up from $469 in Wave 1 of the study.

“There is a seasonal trend in claimant satisfaction, which declines significantly during the winter months,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. “When consumers have an accident and need to repair their vehicle around the holidays, it’s an inconvenience, and road conditions tend to batch accidents, causing volume peaks for the repair industry. Furthermore, for those claimants who incur personal out-of-pocket expenses, having to dip into their holiday savings to pay for repairs is frustrating.”

The study also finds that appraisal and settlement times are taking longer. On average, claimants wait 3.3 days for an insurance appraisal, up from 2.9 days in Wave 1, while settlements take an average of 6.6 days, up from 5.8 days in Wave 1. Settlement payments are also taking longer, averaging 14.9 days in Wave 2, compared with 13.9 days in Wave 1.

Claimants who use a body shop in their insurance company’s dedicated repair network get their vehicle back 1.3 days faster, on average, than those who use an out-of-network shop (8.6 days vs. 9.9 days, respectively). Further, claimants who have their vehicle repaired at a dealership wait an average of 11.9 days, compared with 11.0 days for those who have repairs at an independent or chain shop.

“While using a shop that’s in the insurer’s network may limit where claimants can take their vehicle for repairs, it generally speeds up the repair process,” said Bowler. “The insurance companies may have priority at their network shops, where individual claimants may find themselves at the back of the line at an independent shop.”

The study measures customer satisfaction with the claims experience for auto physical damage loss. Depending on the complexity of a claim, a claimant may experience some or all of the following factors measured in the study: first notice of loss; service interaction; appraisal; repair process; rental experience; and settlement. Settlement is the most important factor in overall satisfaction among both total loss and repair claimants.

The 2013 U.S. Auto Claims Satisfaction Study—Wave 2 is based on 2,878 responses from auto insurance customers who settled a claim within the past 6 months. The study excludes claimants whose vehicle only incurred glass/windshield damage or was stolen, or who only filed roadside assistance claims. Wave 2 of the study was fielded between November and December 2012.

Source: J.D. Power and Associates

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