J.D. Power: Auto Claimants Being Paid Faster; Happier as a Result

J.D. Power: Auto Claimants Being Paid Faster; Happier as a Result

Overall Satisfaction Is Up, But Repairs Can Be Problematic

By Christina Bramlet, PropertyCasualty360.com

January 25, 2013

As repairable and total loss auto claims are being paid faster, policyholders and claimants report being a little happier about the entire claims process.

At least that’s what the results of the J.D. Power and Associates 2013 U.S. Auto Claims Satisfaction Study-Wave 1 indicate. Released yesterday, the study’s findings point to a six-point increase in claimant satisfaction when the Westlake Village, Calif.-based firm compared the 4Q 2012 results to the same period the previous year.

Customer satisfaction with the auto claims process registered at 861 (on a 1,000-point scale), up from 855 for the fourth quarter of 2011. The hike in overall satisfaction, J.D. Power says, can be attributed largely to an 11-point improvement in settlement satisfaction.

Timing Is Key

Driving smoother settlements is a decrease in the average time auto claimants wait to be compensated by insurers. J.D. Power reports that claimants’ average wait time for payment was 13.9 days in the fourth quarter of 2012, compared to 16.4 days for the same period in 2011.

While the average time to pay claimants for a repairable claim (11.8 days) decreased by 1.3 days from 4Q 2011, the most notable decrease is in the time required to pay total-loss claims—down by an average of 5.1 days to 18.5 days.

"Regardless of the claim type, the faster the claimant is paid and can move forward with a repair or to replace their vehicle, the more likely they are to be satisfied," said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. "In addition, satisfaction with the claims professional is at an all-time high, indicating that the process is becoming smoother, with more frequent updates throughout contributing to a much more satisfying experience."

The study measures claimant satisfaction with the claims experience for auto physical damage loss. Depending on the complexity of the claim, a claimant may experience some or all of the following, which are measured in the study: first notice of loss (FNOL); claim service interaction; damage appraisal; repair process; rental experience; and settlement.

Auto Repairers Lagging

Interestingly enough, while overall claims satisfaction improved, contentment with the repair process was somewhat dubious. The study pointed to a slight increase in average repair cycle times, from 12.3 days in 4Q 2011 to 13.5 days in 4Q 2012.

This would partially account for the subtle decline in participants’ satisfaction with the repair process—down to 862 from 864 during the fourth quarter of 2011. Contributing to lower satisfaction is a decline in the percentage of vehicles being fixed right the first time—89 percent in 4Q 2012, compared with 91 percent in 4Q 2011.

"While insurers have made significant progress in the past 12 months to improve the efficiency of the claims process, the repair providers have not kept pace," said Bowler. "Failure to repair a vehicle correctly is critical to the customer experience as average satisfaction scores tumble over one hundred points for those who had to bring their vehicle back for repeat repairs."

On average, claimants who take their vehicle to a non-direct repair provider wait 16 days to get their vehicle back, which is nearly 3 days (2.9 to be exact) longer than when dealing with a direct repair provider (13.1 days, on average). The gap in time between a direct repair provider and non-direct repair provider in the fourth quarter of 2012 has increased from only 1.8 days in the same period in 2011.

The 2013 U.S. Auto Claims Satisfaction Study-Wave 1 is based on responses from more than 3,000 auto insurance customers who settled a claim within the past 6 months. The study excludes claimants whose vehicle incurred only glass/windshield damage or was stolen, or who only filed roadside assistance claims. Survey data for Wave 1 of the study was gathered in December 2012.


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