First notice of loss call sets tone for claims reporting experience

The first notice of loss call a customer makes to their insurance provider after a collision or having vehicle damage “sets the tone” for their overall claims experience, notes a new satisfaction survey from J.D. Power.

That first phone call averages 18 minutes, according to the study, based on responses from 2,458 auto insurance customers in Canada who settled an auto insurance claim within the past 18 months.

“If that initial call goes well, odds are good that the claims process will go well and also bodes well for the long-term relationship with the customer,”  said Jeremy Bowler, senior director of the insurance practice at J.D. Power.

Settlement remained the most important factor in the claims experience, the study notes.

However, claimants who received an explanation during that first call with their provider about what to expect from the process reported being “significantly more satisfied” that those who didn’t, it says.

While a majority (87%) of claimants received an explanation, overall satisfaction declined by a substantial 169 index points (based on a 1000-point scale), on average, when claimants didn’t receive an explanation of the process, J.D. Power notes.

Overall satisfaction was also higher when insurers answered all claimant questions during that first call, according to the study. Satisfaction among claimants who had all of their questions answered during the first call averaged 810, compared with an average of 651 among claimants who didn’t have their questions answered.

Overall, 90% of claimants were satisfied with their settlement, which is the largest contributor to overall satisfaction with the claims process, according to J.D. Power.  However, when expectations weren’t met, settlement satisfaction declined dramatically, by more than 250 index points, on average, the study suggests.

“Communication between the provider and the claimant is critical during the settlement phase,” said Bowler. “The claimant wants to know what is and isn’t covered by their policy, the extent of the damage to the vehicle, and how and when it will be repaired or replaced. It’s really about setting claimants’ expectations and then meeting them.”

While claimants were most satisfied with the repair process, which averaged 805 index points, satisfaction with the appraisal process was lower than for any other factor in the study, it also notes.

“Insurance is a product people buy because they have to, but hope they never need to use,” Bowler said. “They really see the value of their investment if they need to file a claim.  If the appraisal of damages comes in lower than what they expect, they are naturally going to be disappointed.”

Overall customer satisfaction with the auto claims experience  among Canadian provinces included in the study averaged 787, ranging from a high of 840 in Quebec to a low of 753 in Manitoba.  Among other provinces, Ontario averaged 800; Alberta 770; British Columbia 767; and Saskatchewan 760.