Report Shows Trust Top Driver of Auto Insurance Customer Satisfaction

High auto insurance premiums don’t necessarily erode customer satisfaction with auto insurers, according to the latest J.D. Power 2024 U.S. Auto Insurance Study.

The study, in its 25th year, has been redesigned to measure auto insurer customer satisfaction based on performance in seven core dimensions( level of trust; price for coverage; people; ease of doing business; product/coverage offerings; problem resolution; and digital channels) on a poor-to-perfect rating scale.

“As long as customers have a high level of trust in their insurer, customer satisfaction and brand advocacy increase considerably, even in the face of rate increases,” the report found.

Though, slightly more than half (51%) of customers say they have little trust in their auto insurer, with just 15% having high levels of trust and 34% reporting mid levels of trust.

“Auto insurers are in a tough position right now,” said Breanne Armstrong, director of global insurance intelligence at J.D. Power. “With repair costs still rising—and with more than 20% of vehicles involved in collisions now considered total write-offs—insurers are still losing money, despite passing along huge price increases to their customers. What’s interesting in J.D. Power data is that even though high premiums negatively affect customer satisfaction, those negative influences can be offset by high levels of trust that insurers will come through when they are needed.”

Trust has the largest influence on customer satisfaction and brand loyalty, the study found.

The average overall satisfaction score among auto insurance customers with the highest level of trust in their insurer is 917 (on a 1,000-point scale), a full 426 points higher than among those who have the lowest level of trust in their insurer.

Similarly, 90 percent of those in the high-trust category say they are likely to renew their policy with the same insurer versus just 30 percent among those in the low-trust category.

Trust varies by region, the study found, with Florida – where the incidence of rate increases is highest- scoring lowest with 55 percent customers reporting low levels of trust..

The study found that the lowest trust scores are in regions with the largest proportion of insurer-initiated rate increases.

Managing expectations around rate increases is key component to building trust, J.D. Power found.

The average trust score among customers who experience an insurer-initiated increase—but who fully understand the reasons for that increase and expect the increase—is 735. That is just one point lower than the average trust score among customers who experienced an insurer-initiated rate decrease (736).

The study measures customer satisfaction with auto insurance in 11 geographic regions. A separate category addresses usage-based insurance (UBI), along with diagnostics that influence UBI participants’ experience with their insurer’s usage-based auto products.

The highest-ranking auto insurers and scores by region are:

California: Auto Club of Southern CA (AAA) (684)
Central: Shelter (677) (for a fourth consecutive year)
Florida: Auto-Owners Insurance (654)
Mid-Atlantic: Erie Insurance (713) (for a third consecutive year)
New England: Amica (709)
New York: Travelers (667)
North Central: Erie Insurance (710) (for a fourth consecutive year)
Northwest: PEMCO Insurance (666)
Southeast: Alfa Insurance (693)
Southwest: CSAA Insurance Group (AAA) (683)
Texas: Texas Farm Bureau (686)
Usage-Based Insurance (UBI): Nationwide (842)