Trust Ranks Highest in Auto Insurance Customer Satisfaction as Prices Surge

Auto insurance rates in the U.S. have risen by 11.2% on average in the past year, contributing to continued financial losses for insurers who are still losing five cents on every dollar of premium collected. Despite these price hikes, customer satisfaction with auto insurers remains resilient when trust levels are high. The J.D. Power 2024 U.S. Auto Insurance Study reveals that customer satisfaction and brand loyalty significantly improve with increased trust in insurers. However, only 49% of customers report having a high level of trust in their auto insurer.

According to Breanne Armstrong, director of global insurance intelligence at J.D. Power, insurers face challenges due to rising repair costs and a high rate of vehicle write-offs. Even though high premiums typically reduce customer satisfaction, these effects can be mitigated when customers trust their insurers. The study found that customers with the highest level of trust in their insurers score 917 on a 1,000-point satisfaction scale, 426 points higher than those with the lowest trust levels.

Trust also varies by region, with Florida having the lowest trust scores due to the highest rate of insurer-initiated price increases. Managing customer expectations around rate increases is crucial for building trust. Customers who understand and expect rate increases show trust scores almost equal to those who experienced rate decreases.

The study highlights that building and maintaining trust is essential for insurers, especially in a challenging economic environment. Insurers that successfully manage customer expectations and demonstrate reliability can significantly enhance customer satisfaction and loyalty.