Consumer satisfaction falls amid rising car insurance prices, JD Power survey

Motorists are growing dissatisfied with their car insurance providers as prices rise, according to new research from JD Power. (iStock)

Motorists are becoming increasingly dissatisfied with their car insurance providers as prices rise, according to recent findings from JD Power. The consumer research firm 2022 Insurance Shopping Survey found that rate hikes ranged from a 41% increase in used car pricesraising the cost of replacing and repairing vehicles in addition to forcing insurance companies to raise rates.

“The perfect storm of record replacement costs, increased crash frequency and severity, and an economic outlook that suggests this situation won’t change anytime soon is forcing a major disruption to the industry,” Marty Ellingsworth, executive managing director of JD Power of P&C Insurance Intelligence, said. “In the near term, this disruption is manifesting itself in very low customer satisfaction with price and high levels of new policy shopping.”

He added that going forward, the discrepancy could be a “catalyst for significant adoption of usage-based insurance,” which he said could be the solution for insurers to build loyalty with their customers amid the current state of the economy.

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Who switches car insurance providers the most?

As the cost of car insurance rises, many consumers are looking elsewhere for lower rates and sparking a surge in new policy shopping activity, according to JD Power.

The average overall satisfaction score among those shopping for auto insurance quotes was 862 on a scale of 1,000, the firm’s survey found. This is six points less than last year; six of the nine largest auto insurers – along with six of the 11 mid-sized insurers – have seen a decline in purchase satisfaction so far this year.

At the start of 2022, the percentage of drivers buying new insurance has decreased compared to the previous year. But that changed in March and April as rate hikes became more frequent. The biggest reasons drivers switched insurance during that time, according to the survey, were proactive price checks and rate hikes.

Among those shopping because they had a rate increase on their insurance, 64% reported an increase of 11% or more.

Older generations are also more likely to switch insurance due to cost savings. Specifically, 67 percent of pre-boomers were forced to seek new insurance because of pricing, the study found, compared to just 41 percent of Gen Z shoppers.

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The best car insurance companies when it comes to customer service

When it comes to providing a satisfying buying experience, State Farm ranks highest among large insurers at 885 according to JD Power, out of an average score of 863. Among midsize auto insurers, The Hartford ranks highest at 889, followed by Erie Insurance at 878 and Amica Mutual at 874. The average for mid-sized providers is 855.

Overall, below are the rankings of the major auto insurance providers for their consumer satisfaction:

  • State Farm: 885
  • Farmers: 862
  • Liberty Mutual: 860
  • Progressive: 859
  • Nationwide: 858
  • Allstate: 854
  • GEICO: 853
  • Passengers: 853

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