Perceived fair settlement increases satisfaction with U.S. auto claims experience

The perception that settlement terms were fair drove claimant satisfaction with their claims experience for auto physical damage loss higher in 2012, despite the fact that overall consumers in the United States are paying more for out-of-pocket expenses, notes a new J.D. Power and Associates study.

Data for the J.D. Power and Associates 2012 U.S. Auto Claims Satisfaction Study, collected between November 2011 and September 2012, is based on responses from more than 12,500 auto insurance customers who settled a claim within the past six months. The survey considers claimant experience related to first notice of loss, service interaction, appraisal, repair process, rental experience and settlement.

Satisfaction is up in five of the six factors year over year, notes a statement from the California-based company. Measuring on a 1,000-point scale, settlement – the most important factor contributing to overall satisfaction – increased by nine points to 846. Overall, claimant satisfaction rose six points in 2012 to 852 index points, J.D. Power and Associates adds.

From 2011 to 2012, settlement satisfaction increased 16 points among claimants with a total loss, while the average total loss settlement was up by almost $690. 

Satisfaction with settlement improved overall despite claimants spending more of their own money, with the average out-of-pocket costs incurred up $26 to $403 in year-over-year comparisons. These costs include claimants’ deductibles and any additional expenses incurred, such as rental car or repair costs.

“Among claimants whose only out-of-pocket expense was their deductible, nearly all (96%) say the settlement met their expectations,” the report notes. “The proportion of claimants who say the settlement did not meet their expectations increase fourfold to 12% among those who incurred some type of out-of-pocket expense beyond their deductible.”

Survey findings show insurers are offering more options to keep claimants informed of the progress of their claim, with 64% of claimants indicating having been offered options compared with 61% last year.

Improved policy offerings was among the key factors hiking customer satisfaction with Canadian primary auto insurance carriers, as noted in J.D. Power and Associates’ 2012 Canadian Auto Insurance Satisfaction Study, released last month.

Satisfaction related to interaction, price, policy offerings, billing and payment, and claims improved across all regions of the country since 2011. That satisfaction, however, was not consistent across generations, with baby boomer customers reporting a satisfaction level of 770 compared with 737 for Gen Y customers