Which insurer ranks highest in auto claims experience? | Canadian Insurance

Which insurer ranks highest in auto claims experience?

90% of customers satisfied with settlement of claim: JD Power study

How well auto insurance providers handle claims may make or break the relationship with their customers, according to the J.D. Power 2013 Canadian Auto Claims Satisfaction Study released today.

The inaugural study measures customer 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 factors that are measured in the study: first notice of loss; service interaction; appraisal; repair process; rental experience; and settlement. Settlement is the most important factor of overall satisfaction among both total loss and repair claimants.

Read: JD Power study finds auto insurer satisfaction improving

Although settlement is the most important factor, the first notice of loss (FNOL)—the first phone call a customer makes to their insurance provider after they have been in a vehicle accident or experienced damage to their car—sets the tone for the rest of the claims process.  The first phone call averages 18 minutes, according to the study.

“The first call to notify the provider of the damage is critical to customer satisfaction with the entire claims process,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power, in a press release. “If that initial call goes well, odds are good that the claims process will go well and also bodes well for the long-term relationship with the customer.”

The study finds that claimants who receive an explanation during the first call with their provider of what to expect during the claims process are significantly more satisfied than are claimants who do not receive this explanation. While a majority (87%) of claimants receive an explanation, overall satisfaction declines by a substantial 169 index points, on average, when claimants don’t receive an explanation of the process.

Read: Manitoba experiences 7.8% increase in collision claims in 2012

Additionally, overall satisfaction is higher when insurers are able to answer all claimant questions during the first call than when they are not able to answer all questions.  Satisfaction among claimants who have all of their questions answered during the first call averages 810, compared with an average of 651 among claimants who do not get all of their questions answered during this call.

“Filing a claim can be a stressful situation, so it’s easy to forget to ask key questions or get confused about the information the insurer provides during the call,” said Bowler. “Keeping good records of all calls regarding the incident is helpful for reference later in the claims process, if necessary. It is also advisable for claimants to take pictures of the vehicle damage for their records.”

The settlement process focuses on identifying the expenses the insurance company will cover, including damage to the vehicle, the facility where repairs will be made, and, if needed, a tow truck and rental car.  Managing claimants’ expectations regarding the settlement—and avoiding surprises—is critical to a satisfying settlement experience.  The study finds that, overall, 90% of claimants are satisfied with the settlement, which is the largest contributor to overall satisfaction with the claims process.  However, when expectations are not met, settlement satisfaction declines dramatically, by more than 250 index points, on average.

Read: Many Alberta insurers increase auto rates by 5%

“Communication between the provider and the claimant is critical during the settlement phase,” said Bowler. “The claimant wants to know what is and isn’t covered by their policy, the extent of the damage to the vehicle, and how and when it will be repaired or replaced. It’s really about setting claimants’ expectations and then meeting them.”

While claimants are most satisfied with the repair process, which averages 805 index points, satisfaction with the appraisal process—when the vehicle’s damages are assessed by a representative of the insurer —is lower than for any other factor in the study.

“Insurance is a product people buy because they have to, but hope they never need to use,” said Bowler.  “They really see the value of their investment if they need to file a claim.  If the appraisal of damages comes in lower than what they expect, they are naturally going to be disappointed.”

Regional Findings
Overall customer satisfaction with the auto claims experience in among Canadian provinces included in the study averages 787. Satisfaction varies greatly by province, ranging from a high of 840 in Quebec to a low of 753 in Manitoba.  Among other provinces, Ontario averages 800; Alberta 770; British Columbia 767; and Saskatchewan 760.

Provider Results
Among the eight rank-eligible insurance providers included in the study, RBC Insurance ranks highest in overall customer satisfaction with the claims process with an index score of 815.  RBC Insurance performs particularly well in the first notice of loss and settlement factors.

Read: Rate reduction won’t fix Ontario auto problems, says IBC

Intact Insurance ranks second with 806, followed by Aviva Insurance (803), State Farm (802) and TD Insurance (796).

Customer Satisfaction Index Ranking
(Based on a 1,000-point scale)

J.D. Power Circle Ratings For Consumers

Power Circle Ratings Legend:
5 – Among the best, 4 – Better than most, 3 – About average, 2 – The rest

RBC Insurance 815 (5)
Intact Insurance 806 (4)
Aviva Insurance 803 (4)
State Farm 802 (4)
TD Insurance 796 (4)
Industry Average 787 (3)
Johnson Insurance 783 (3)
Co-operators 782 (3)
Wawanesa 761 (2)

The 2013 Canadian Auto Claims Satisfaction Study is based on responses from 2,458 auto insurance customers in Canada who settled an auto insurance claim within the past 18 months. The study excludes claimants whose vehicle incurred only glass/windshield damage or was stolen, or who filed a roadside assistance claim only. The study was fielded between April and June 2013.

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