Faster checks, but slower repairs
Car insurance companies are getting the hang of high technology, it seems.
According to the J.D. Power and Associates 2013 U.S. Auto Claims Satisfaction Study, released Thursday, overall satisfaction among customers who filed claims increased over the last year, largely because insurers are using high-tech methods to communicate and pay claims.
But the survey found that repairs are taking longer to complete and are less likely to be done correctly. (See "Car accidents: What you need to know.")
The customer-service giant asked 3,000 claimants to rate their satisfaction on a number of items related to insurance claims, such as interaction with the company, the appraisal and repair processes, and settlement. Overall satisfaction increased six points to 861 on a 1,000-point scale, and satisfaction with claims professionals has reached an all-time high, the survey found.
Proactive insurers keep drivers happy, says Mark Garrett, research director at J.D. Power and Associates. "Claims professionals are keeping customers informed of the claim progress at higher rates than in the past."
A process once dominated by phone calls is now complemented by e-mail and online status updates, technologies that showed a steady increase in use over the last 12 months, Garrett says.
Settlement satisfaction saw a big increase, jumping 11 points. Electronic payments put settlements into customers' hands more quickly. Days required to pay a claim fell from 16.4 in 2011 to 13.9 in 2012. Total loss claims saw the biggest improvement, with the average dropping 5.1 days to 18.5 while repairable claims were settled 1.3 days faster.
Faster checks are great, but the study found that the perceived fairness of the settlement carries almost equal weight. (See "What you need to know about insurance claims.")
While insurers improved their standing with customers, repair shops are falling behind. The study found that the average cycle time for repairs increased 1.2 days to 13.5. In addition to an increase in repair time, satisfaction with the repair process dropped two points to 862. Failure to fix the vehicle right the first time is largely responsible for the drop in satisfaction, with only 89 percent of repaired vehicles passing this test, compared to 91 percent in 2011.
Improper repairs had a big effect on satisfaction, says Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. "Failure to repair a vehicle correctly is critical to the customer experience," he says. "Average satisfaction scores tumble over 100 points for those who had to bring their vehicle back for repeat repairs."