2020 shakes up the car insurance industry in a good way

Posted: 26 October 2020 10:54 am
News

Insurance agent checking damage on a car

A company you’ve never heard of just made it to the top for customer satisfaction.

With fewer people out and about on the roads due to COVID-19, insurers are seeing fewer collision claims and in turn have not only been able to reduce premiums but also focus more on customer service. So much so that 2020 car insurance companies scored a record high level of customer satisfaction levels, according to the J.D. Power 2020 US Auto Claims Satisfaction Study.

For the third consecutive year, satisfaction among consumers in regards to their auto insurer has gone up, with satisfaction levels hitting 872 out of a possible 1,000-point scale, which is four points higher than 2019 (268).

Which insurer has the highest ratings?

An insurer you’re probably not familiar with unless you’re from New Jersey, NJM Insurance Co., sits atop the podium with the highest in overall customer satisfaction, scoring 909. What makes this even more impressive is that while NJM Insurance Co. did not qualify for the list last year – at the time of the survey, NJM’s membership was closed – if they had qualified, they would have taken the top spot in 2019 as well with a score of 900.

Rounding out the top three performers are Amica Mutual (907) and Auto-Owners Insurance (890).

What the best companies did to improve

In 2020, car insurers improved satisfaction in five of the six categories scored by J.D. Power. The categories that saw improvement were claim servicing, estimation process, repair process, rental experience and settlement. The only area that didn’t see its score rise was first notice of loss, which remained flat.

Most notably, the time it took for insurers to process claims dropped by a factor of days, from 12.6 days pre-pandemic to process a claim to 10.3 days. All these improvements probably factor into why there was a four percentage point bump in people who said they “definitely will” renew with their existing insurer, jumping from 72% pre-pandemic to 76% during the pandemic.

What a difference a year makes

NJM Insurance Co. may have taken the top spot for satisfaction in 2020, but its score only improved year-on-year in line with the industry average of 1%. National General, while being the lowest-ranked insurer on the list, did get an A+ for effort, lifting its score by 5% year-on-year. At the other end of the spectrum is last year’s runner up Country Financial, with its score dropping by 4% year-on-year.

Insurer 2019 2020 % Change
NJM Insurance Co. 900* 909 1%
Amica Mutual 898 907 1%
Auto-Owners Insurance 870 890 2%
The Hartford 873 888 2%
MetLife 867 886 2%
State Farm 878 881 0%
Erie Insurance 879 880 0%
Allstate 853 876 3%
Nationwide 867 876 1%
Farmers 865 872 1%
Industry Average 868 872 N/A
Esurance 844 871 3%
GEICO 879 871 -1%
Safeco 855 870 2%
Liberty Mutual 857 867 1%
Auto Club of Southern California Insurance Group 866 866 0%
COUNTRY Financial 896 863 -4%
American Family 857 862 1%
CSAA Insurance Group 847 862 2%
Travelers 865 861 0%
Automobile Club Group 857 858 0%
Progressive 856 856 0%
Mercury 837 849 1%
MAPFRE 842 844 0%
National General 778 815 5%
USAA** 900 890 -1%

*NJM Insurance Co. was not rank eligible at the time of fielding for this study. However, now that its membership is open to anyone, it was rank eligible in 2020.
**USAA is an insurance provider open only to US military personnel and their families, and therefore it’s not included in the rankings.

Photo: Getty Images

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