When comparing car insurance companies online, terms like “claims satisfaction” frequently pop up.
But what exactly is claims satisfaction? How is claims satisfaction measured? Which companies score the best for claims satisfaction? Today, we’re explaining everything you need to know about claims satisfaction, including how much of a role it should play in your car insurance comparison process.
What is Claims Satisfaction?
Claims satisfaction is a general term used to compare car insurance companies. It refers to how pleased a policyholder was with the process of filing the claim, communicating with the insurer, and receiving the final payout.
Sometimes, claims satisfaction can refer to a specific report. J.D. Power, for example, releases an annual report called the U.S. Auto Claims Satisfaction Study. This report compares claims satisfaction ratings for major insurance companies across the United States.
Other, smaller rating agencies release their own claims satisfaction ratings. Certain websites release annual claims satisfaction ratings, for example.
Why Is Claims Satisfaction Important?
A lot of car insurance companies dazzle customers with low prices upfront. These companies’ car insurance policies work great until you have to make a claim. The company might deny or reduce your claim based on hidden terms, for example. Or, the company might demand excessive amounts of paperwork.
Claims satisfaction is important because any car insurance company can make big promises, but only the best car insurance companies live up to those promises.
You might save $100 per year on car insurance with a cheaper car insurance provider. However, if the company denies your claim, then it could cost you $20,000 to replace your car out of pocket. Suddenly, the $100 per year cost savings don’t seem worth it.
Ultimately, claims satisfaction is one of the most important ways to compare car insurance companies against one another. Good car insurance companies have strong claims satisfaction ratings.
What’s Included in a Claims Satisfaction Rating?
The specific metrics vary between rating agencies. Generally, claims satisfaction ratings try to measure how smooth and easy it was for customers to make a claim, process the paperwork, and receive a payout.
Did the insurance company demand excessive amounts of paperwork? Did the insurer drag its feet, refuse to respond to claims, or force customers to wait on hold for hours with every call?
Ultimately, a claims satisfaction rating attempts to answer these questions.
J.D. Power, for example, includes seven different rating factors in its U.S. Auto Claims Satisfaction Study, including:
Overall Satisfaction: How did customers rate their overall insurance claims experience?
First Notice Of Loss (FNOL): How did claimants rate the insurance company’s initial claims reporting process? How easy was it to first file a claim?
Estimation Process: How did the claimants rate the estimation process? Was the insurer’s estimate fair and accurate?
Rental Experience: Did the insurance company cover the cost of a rental car? Was the rental car reimbursement process easy?
Claims Servicing: How did claimants rate the insurance representative handling the claim? Was the representative easy to reach and responsive? Was the representative professional and friendly?
Settlement: How did customers feel about the final settlement? Were customers happy with the final settled amount? Or were they disappointed by the ultimate offer?
Each metric is ranked out of five stars. J.D. Power gets this information by sending surveys to thousands of drivers across the United States. Based on their responses, J.D. Power compiles its rankings annually.
Which Companies Score the Best for Claims Satisfaction?
J.D. Power’s 2018 rankings analyzed 20 insurance companies across the United States. Here’s how each company ranked in terms of overall claims satisfaction:
- Erie Insurance: 5 Stars
- USAA: 5 Stars
- Amica Mutual: 5 Stars
- Auto-Owners Insurance: 4 Stars
- Farmers: 4 Stars
- Auto Club of Southern California Insurance Group: 3 Stars
- The Hartford: 3 Stars
- Travelers: 3 Stars
- State Farm: 3 Stars
- Nationwide: 3 Stars
- GEICO: 3 Stars
- Allstate: 3 Stars
- Automobile Club Group: 3 Stars
- MetLife: 3 Stars
- 21st Century: 3 Stars
- American Family: 3 Stars
- Esurance: 3 Stars
- Progressive: 3 Stars
- Safeco: 3 Stars
- Liberty Mutual: 2 Stars
- CSAA Insurance Group: 2 Stars
- MAPFRE Insurance: 2 Stars
- Mercury: 2 Stars
Companies might receive identical scores for claims satisfaction but have different scores for individual metrics.
Erie Insurance, for example, had a perfect five-star rating in all categories except for Repair Process, which is where it scored four stars.
USAA, meanwhile, had five stars in every metric except for Estimation Process, which is where it scored four stars.
Mercury, the lowest-rated of the 20 major car insurance companies on the 2018 report, had a two-star rating in all seven categories, which is the lowest possible score with J.D. Power.
Claims Satisfaction Ratings Vary Between States and Regions
The claims satisfaction ratings above are based on J.D. Power’s nationwide study. They represent the average score for car insurance companies across the United States.
However, J.D. Power also releases 11 regional or state rankings for California, Central, Florida, Mid-Atlantic, New England, New York, North Central, Northwest, Southeast, Southwest, and Texas.
Each state has its own unique insurance laws. Some insurance companies also only serve one region or state. Because of this effect, claims satisfaction ratings can vary widely between regions and states.
Here are the companies with 5-star overall claims satisfaction ratings for each of the 11 states and regions on the latest J.D. Power report:
- California: Esurance and USAA
- Central: Shelter, USAA, and Auto-Owners Insurance
- Florida: Allstate, USAA, and Esurance
- Mid-Atlantic: Erie Insurance, USAA, and NJM Insurance Co.
- New England: Amica Mutual and USAA
- New York: New York Central Mutual and USAA
- North Central: Westfield Insurance, USAA, IN Farm Bureau, and Erie Insurance
- Northwest: PEMCO Insurance and USAA
- Southeast: Farm Bureau Insurance – Tennessee
- Southwest: The Hartford, USAA, and State Farm
- Texas: TX Farm Bureau and USAA
Claims satisfaction is an easy and effective way to compare car insurance companies.
Some budget car insurance companies, for example, have low claims satisfaction ratings. You save money on premiums but will have a tough experience when making a claim.
Other companies have strong claims satisfaction ratings but high premium prices.
Based on your budget and insurance needs, you can find an insurance company that offers the right blend of strong claims satisfaction and pricing.