Repair cycle times, rising costs drive customer satisfaction for auto claims, study finds – Insurance News

While auto repair cycle times have improved, rising repair costs and increased premiums are impacting customer satisfaction, especially as many policyholders face additional costs following claims, according to J.D. Power’s 2024 U.S. Auto Claims Satisfaction Study.

For claims filed later in the 2024 study period, the repair cycle time dropped to 18.9 days, down from 23.9 days earlier, marking a significant improvement. This trend brings the overall average repair cycle time to 22.3 days—1.0 day shorter than in 2023, and a hopeful sign for customer expectations in claims processing. However, when results are broken out by quarter in which the claim was filed, times have improved steadily since peaking in early 2023, for a total 5.0-day reduction throughout fielding of the 2024 study.

While repair times have decreased, however, rising costs remain a challenge, according to the study. Repair costs have increased by 26% over the past two years, with premiums up 15% in just the last year. This trend affects nearly half of all respondents, and satisfaction is notably lower among those who faced rate hikes before filing a claim. Mark Garrett, director of global insurance intelligence at J.D. Power, warned that “premium increases have created a new challenge for insurers as trust is eroding… In fact, 80% of auto insurance customers who have poor claims experiences have already left or say they plan to leave that carrier.

Generations differ on digital claims

The study also found that insurers have invested in digital tools for claims, including mobile apps, with growing adoption among younger policyholders. Customers who handle their claims fully within these digital channels report higher satisfaction scores, averaging 775 on J.D. Power’s 1,000-point scale. However, digital-only claims processing remains popular with just 13% of users, as boomers and pre-boomers still prefer traditional methods, often favoring interactions with agents over digital tools.

Communication is key

The study reinforces that communication remains a top driver of satisfaction, with clients reporting better experiences when they find it “very easy” to communicate with their insurers. J.D. Power identified key indicators of effective communication, including responsiveness, accessibility, and proactive updates. For agents, emphasizing these communication skills and managing timing expectations can be instrumental in helping clients feel supported during the claims process.

Top performers

Among auto insurers, NJM Insurance Co. ranks highest in customer satisfaction with a score of 782, followed by Amica at 746 and Erie Insurance at 733. These rankings provide a benchmark for agents seeking to recommend insurers that have demonstrated excellence in client satisfaction.

The 2024 U.S. Auto Claims Satisfaction Study collected responses from 9,725 auto insurance customers who settled claims within the past nine months, focusing on aspects of trust, settlement fairness, communication, and ease of resolving claims. For agents, the study’s findings highlight the evolving landscape of auto insurance claims and underscore the importance of adaptability, proactive communication, and digital literacy in meeting clients’ needs effectively.