The recently released J.D. Power 2016 U.S. Auto Insurance Study revealed that overall customer satisfaction levels have declined after two years of improvement. The report also suggested that the perception of price increases was the main culprit for the decline in customer satisfaction.
The study measures customer satisfaction based on a 1,000-point scale in five factors—Interaction, Policy Offerings, Price, Billing Process and Policy Information.
Last year, overall customer satisfaction was at 818, but this year’s study posted 811. The J.D. Power report indicated that the main reason for this decline was due to 17 major insurers posting significant declines of up to 7 points down.
Customer satisfaction with local agents similarly dropped by 7 points, the study found. This might have something to do with how consumers perceive the worth of their policies through their agents, the authors of the report posited.
“Price perception among customers of smaller insurers is likely influenced by the fact that they frequently select their insurer with the help of an independent agent,” said J.D. Power vice president of U.S. insurance operations Greg Hoeg. “Smaller insurers benefit from the personal interactions provided by their agency force, including their ability to educate customers about the value their policy provides.”
A feature on the NBC Today Show
Monday expounds on the problem with pricing. In the feature, the rise of auto insurance rates could be traced back to the currently affordable price of gas and the improving economy—two factors that got more people to drive on the road and thus increase the risks of auto accidents. Newer cars and their technology, which makes them costlier to repair, were also cited as a factor in increasing auto insurance rates.
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