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Auto Insurance Satisfaction at Record High: J.D. Power

The bump comes despite rising rates.

Customer satisfaction with their auto insurance companies reached the highest level in the 10 years that J.D. Power & Associates has been measuring it, the marketing services company reported today.

The 2014 U.S. Auto Insurance Study is based on responses from 44,661 auto insurance customers collected earlier this year on customer satisfaction across five factors: interaction; price; policy offerings; billing and payment; and claims. The aggregate satisfaction with the industry was 810 on J.D. Power's 1,000 point scale, up 16 points from last year.

The record satisfaction comes even after a few years of premiums trending up. However, the average increase in premium this year was just more than half of last year, and that combined with effective explanation of the reasoning for increases might help matters.

[Previously from J.D. Power: Customers dissatisfied with auto rates after switching]

"A premium increase often triggers shopping behavior, but we're seeing fewer people shopping," said Jeremy Bowler, senior director of the insurance practice at J.D. Power, in a statement. "This indicates that insurers are more effectively communicating with their customers, making them aware of the premium increases when they occur and why they're necessary, and demonstrating the value of their coverage."

The increased satisfaction also means increased customer retention for insurers. More than half of respondents said they would "definitely" renew their policy next year.

Additionally, most of the improvement this year at the insurer level comes from the smaller insurers in the industry. The 20 largest insurers, based on the amount of written premiums, improved by 10 points in the aggregate, while the smallest insurers measured improved by 41 points.

Finally, as was the case last year, the best-ranked insurers in each of J.D. Power's 10 regions were often insurers local to that region: PEMCO in the Northwest and Amica in New England, for example.

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio

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