Poor Service Experience Major Factor for Switching Auto Insurers- J.D. Power


2014 ranking of auto insurance companies by J.D. Power state price factor as crucial element. Customers switch insurers dissatisfied with new prices.

According to the latest study of the 2014 U.S. Insurance Shopping by J.D. Power, customers who switch their auto insurers due to poor services are sorry in the end as they have to pay more to the new insurer.

In the report it was stated that the poor experience and service with the car insurance company is the major reason why customers switch to new insurers. However the major reason of their dissatisfaction with the new car insurers is the declining new price.

Speaking on the issue Jeremy Bowler, J.D. Power’s senior director of the insurance practice said, “The insurance industry spends billions of dollars each year on advertising, and over the last seven years many of those ads have tried to entice customers with big savings.” He added, “While switching to a new insurer usually results in savings, the ads make promises of savings that a growing number of new customers don’t believe they’ve received.”

In the study it was revealed that 30% of automobile owners shopped for insurances in 2013. Among these 36% eventually switched to new insurance providers. Customers with a premium increase in their insurance rate shop much less for new insurers at13% as compared to those with a poor experience shopping at 28%.

Study also clarified the fact the rate increase do not as significantly results into insurer switching as poor experience and service does. However it is found that the hike in the rates at more than $200 can increase the number of customers switching insurers 3 times.

Price is again found to be major criteria for the selection of the insurance company with 8 out of 10 customers opting for insurers who are lowest-priced. The overall scoring of satisfaction of new buyers based on experience of auto insurance on a scale of 1,000 points, it averaged to 821 which are lower as compared to 2013 score which was 828.

The decline in the satisfaction level of the customers is affected by drastic 17 points fall in price factor.

Ranking in the Study

Based on the total score, J.D. Powers ranked auto insurance companies. Top 10 scorers are:

  1. Erie Insurance 843
  2.  MetLife 839
  3. State Farm 839
  4. Ameriprise 835
  5. American Family 835
  6. The Hartford 834
  7. Liberty Mutual 833
  8. Automobile Club Group 827
  9. Esurance 826
  10. Auto Club of Southern 825

Erie Insurance is once again topping the list of providing the most satisfying auto insurance services to the customers.