Overall satisfaction with auto claims held steady in the second quarter of 2013, but the latest J.D. Power survey indicates that customers in the Mid-Atlantic States were very dissatisfied with how insurers handled claims following Superstorm Sandy.
The J.D. Power 2013 Auto Claims Satisfaction Study—Wave 3 results show a two-point increase in overall claimant satisfaction to 852—on a scale of 1,000—from the Wave 2 study [January – March 2013].
However, the report does show significant dissatisfaction among consumers, particularly in the Mid-Atlantic where satisfaction with the claims process for vehicle total loss declined by a significant 57 points. Satisfaction with the appraisal process declined by 71 points and satisfaction with the settlement process dropped 76 points.
Jeremy Bowler, senior director of the insurance practice at J.D. Power says the numbers may reflect customer experience following Superstorm Sandy—that hit the region in late October along with a Nor'easter in February of this year. Sandy produced record auto losses of more than 250,000 according to one estimate, and strained the capabilities of auto insurers to settle claims.
When asked by PC360 why dissatisfaction with claims results in the Mid-Atlantic States did not appear in the Wave 2 survey, Bowler explains that those surveyed have completed the claims process. At the time of the earlier survey, many claimants from Sandy and the Nor'easter probably had not completed the process. He says Sandy and the Nor'easter offer the only credible explanation for such a significant change in satisfaction.
On the positive side, out-of-pocket expenses for repairable claims, such as the deductible and vehicle rental, dropped $38 to an average of $461. However, out-of-pocket expenses for total losses increased $8 to $600.
Bowler says satisfaction in four of six factors the survey measures were up, but satisfaction with the appraisal process among total loss claimants declined 25 points.
The report measures six factors in customer satisfaction with the claims experience for auto physical damage loss:
• First notice of loss
• Service interaction
• Appraisal
• Repair process
• Rental experience
• Settlement
The study found policyholders with a repairable vehicle claim wait close to three days for an insurance appraisal, whereas the wait for a total loss averaged close to five days. Getting settlement terms was relatively quick at a little over five days for individuals with repairable claims, but longer for total loss at just over 12 days, an increase of close to two days from the earlier survey. Claims payment for total loss was longest at almost 21 days, an increase of just over 4 days from the previous survey.
Bowler says one point the survey underscores is the importance of dealing directly with the insurer or agent. Seventy percent of claimants interacted with their insurer related to an appraisal. The satisfaction numbers were 30 points higher for those who interacted than those who did not.
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