J.D. Power is one of the most trusted rating agencies in the car insurance industry.
Every year, J.D. Power ranks some of America’s biggest and best-known car insurance companies. The organization will analyze car insurance companies based on their price competitiveness, claims satisfaction, and other key rankings factors.
But how do J.D. Power car insurance rankings work? Does J.D. Power legitimately take the time to analyze companies? Today, we’re explaining everything you need to know about how J.D. Power’s car insurance rankings.
What is J.D. Power?
J.D. Power is a Los Angeles, California-based marketing information services company founded in 1968 by James David Power III.
Since launch, the company has conducted surveys of customer satisfaction, product quality, and buyer behavior across multiple industries, including cars, marketing, insurance, and more.
Today, J.D. Power is headquartered in Costa Mesa, California. The company has been sold twice throughout its history. In 2005, James David Power himself sold the company to McGraw Hill Financial for $400 million. In 2016, J.D. Power was sold again to XIO Group for $1.1 billion.
The company continues to grow. Starting in 2017, J.D. Power began selling financial and insurance products through car dealerships. The company is also rapidly expanding its data, analytics, and consumer insights divisions.
Industries Covered by J.D. Power Rankings
J.D. Power currently covers nine major industry categories, including:
- Financial Services
J.D. Power Auto Rankings
J.D. Power is best-known today for its automotive rankings. The company conducts multiple annual surveys of the automotive industry in the United States and around the world.
J.D. Power uses surveys like its Vehicle Dependability Study (VDS) to measure problems experienced by vehicle owners after three years of ownership. They also conduct the Initial Quality Study (IQS), which tracks problems experienced in the first 90 days of ownership. Other studies analyze dealership service, vehicle attributes, customer purchasing experience, and more.
J.D. Power Auto Insurance Ratings
J.D. Power analyzes multiple aspects of the insurance industry in the United States. Major J.D. Power insurance surveys cover agents and brokers, automotive insurance, commercial insurance, health insurance, home insurance, life insurance, and online insurance shopping, among other aspects of the industry.
In the auto insurance category, J.D. Power offers two major studies:
- U.S. Auto Claims Satisfaction Study
- Insurance Shopping Study
J.D. Power analyzes this information nationwide, but also collects certain regional and state-specific breakdowns.
U.S. Auto Claims Satisfaction Study
The U.S. Auto Claims Satisfaction Study measures the overall satisfaction insurance policyholders have with a particular company. J.D. Power analyzes over 20 major car insurance companies in the United States based on seven factors related to the claims process, including:
Overall Satisfaction: How do customers rate their overall experience with the insurance claim process?
First Notice of Loss (FNOL): How did customers rank the company based on the initial claims reporting process?
Estimation Process: How did customers rate the insurance company based on their estimation process?
Repair Process: How easy was it to repair the vehicle to pre-loss condition after a loss?
Rental Experience: Did the insurance company cover the cost of renting a vehicle? How easy was the rental car compensation process?
Claims Servicing: How well did the specific company representative handle the claim?
Settlement: How smooth was the final settlement process, including the final receipt of payment from the insurance company after the claim?
Insurance Shopping Study
The J.D. Power Insurance Shopping Study, meanwhile, measures how an insurance company stacks up against its competition for policy offerings, value, and pricing. Some of the factors measured in this study include:
Overall Satisfaction: How satisfied were customers with the policy offerings, shopping experience, and pricing overall?
Policy Offerings: Did the insurance company offer multiple customizable policy offerings as standard or bonus features?
Price: How did the insurance company compare to its competitors in terms of price?
Call Center Representative: How well did the call center representative handling the application deal with the customer?
Insurer Website: Was the insurance company’s website easy to use, navigate, and compare policy options?
Regional Automotive Insurance Studies
J.D. Power also compiles auto insurance rankings for certain states and subregions of America. Insurance companies vary widely across the country. A customer who has a good experience with GEICO in New York, for example, may have a completely different experience with GEICO in Alaska. Because of that, J.D. Power does regional breakdowns based on overall satisfaction, policy offerings, price, billing process and policy information, interaction with the company, and claims satisfaction.
States and sub-regions covered by J.D. Power include:
- New England
- New York
- North Central
You can view insurance rankings countrywide or check rankings specific for your region.
How Does J.D. Power Calculate Insurance Ratings?
J.D. Power collects all of the above information by surveying customers.
For the 2019 rankings, J.D. Power created the rankings based on responses from 42,759 auto insurance customers collected between February and April 2019.
Customers are asked to share their satisfaction based on five different factors, including interaction, policy offerings, price and billing process, policy information, and claims.
J.D. Power has created their car insurance comparison ratings since 1999.
J.D. Power is one of the largest and most influential marketing information services in the world today. Every year, the company surveys over 42,000 policyholders across America, collecting information about price, value, and claims satisfaction, among other factors.
Only one company scored a perfect five stars in overall satisfaction in both the Insurance Shopping Study and the Auto Claims Satisfaction Study in 2018: Erie Insurance. Two other companies scored a perfect five stars for claims satisfaction, including USAA and Amica Mutual. No other companies scored higher than four stars for overall insurance shopping satisfaction.
You can view J.D. Power’s complete auto insurance industry rankings here.