Drivers trust their auto insurers despite rising premiums
Florida scores lowest for policyholder faith in carriers.
A new study from J.D. Power showed drivers have faith in insurance carriers that talk to them about their premium increases.
With auto rates surging roughly 11.2% over the last year, “Carriers who get in front of the increases are able to maintain high levels of trust with their customers versus carriers who don’t communicate the increase and why,” J.D. Power’s Director of Global Insurance Intelligence, Breanne Armstrong, told PropertyCasualty360.com.
“Trust for a premium decrease is 736 on a 1,000-point scale compared to 735 for an increase when the customer expected it and understood why,” she said. “But, even before insurers are saddled with having to communicate why prices are going up, they can form a solid foundation for a trusting relationship with their customers by ensuring they completely understand their policy and what it covers.”
The data also showed insurers still losing an average of five cents on every dollar of premium they collect.
Using the 1,000-point scale, Armstrong said trust scores a 581 for carriers whose customers don’t understand their policy versus 713 for carriers with customers who do.
With 39% of the overall customer base saying they don’t understand their policy, the issue is worse for Gen Z, with 48% of the demographic not completely understanding their policy, she said. “Having a well-established trusting relationship can also help mitigate the impact of premium increases and develop less price sensitive customers.”
Some key findings from the study include slightly more than half (51%) of customers fall into the low-trust category, while 15% have high levels of trust and 34% have mid-levels of trust.
Trust also varies by region, with Florida scoring the lowest. According to the study, the highest-ranking auto insurers and scores by region include the Auto Club of Southern CA in the California region at 684, Shelter in the Central region at 677, followed by Erie Insurance in the Mid-Atlantic region at 713 and Amica in New England at 709.
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