Total-Loss Car Insurance Claim Satisfaction Downed by Storms
Last year’s Superstorm Sandy and a damaging storm this year contributed to dissatisfaction among drivers with their total-loss insurance claims, according to J.D. Power and Associates’ second-quarter report on car claim satisfaction.
When looking at overall satisfaction for drivers with all types of claims, though, satisfaction remained relatively steady.
The firm regularly publishes its Auto Claims Satisfaction Study, with its last, released in April, surveying consumers about their insurance claims experiences in the first quarter.
The study breaks down their experiences into six categories, with the first carrying the most weight in overall satisfaction:
–First notice of loss
Overall Claim Satisfaction Up a Bit from Q1
A quarter-to-quarter comparison of auto insurance claims satisfaction showed an overall rise from 850 points in the first quarter to 852 points in the second quarter of this year, based on a 1,000-point scale.
The 2-point increase showed that overall claims satisfaction “held steady” and at least partly reversed an 11-point drop between the first quarter of 2013 and the fourth quarter of 2012.
Survey Shows Dissatisfaction with Several Areas of Total-Loss Claims
However, the report also showed major decreases in satisfaction with total-loss claims.
J.D. Power attributed the broad decline in satisfaction with several parts of the total-loss claims to an increase in claims filed in the Mid-Atlantic U.S. That region was struck by Superstorm Sandy last year and Winter Storm Nemo in early 2013.
After Superstorm Sandy raked across a large region of the U.S. last October, the National Insurance Crime Bureau (NICB) reported that car claims were spread across more than a dozen states and were concentrated in densely populated areas of New York and New Jersey.
A bulk of those insurance claims was for vehicles so damaged—many of them submerged in seawater—that they had to be declared a total loss.
According to J.D. Power’s latest report, the Mid-Atlantic region saw “significant” drops in three major categories of total-loss insurance claims satisfaction:
–Satisfaction with the appraisal process: A 71-point drop
–Satisfaction with the claims process: A 57-point drop
–Satisfaction with the settlement process: A 76-point drop
J.D. Power also found that total-loss claimants in the second quarter waited longer for appraisals, settlement offers and settlements to get to them.
The average time it took for a total-loss claimant to have their vehicle appraised increased from 4.2 days in the first quarter to 4.8 days in the second quarter.
The average time it took for a total-loss claimant to receive settlement terms for their vehicle increased from 10.5 days in the first quarter to 12.3 days in the second quarter.
The average time it took for a total-loss claimant to receive the settlement itself increased from 16.6 days in the first quarter to 20.9 days in the second quarter.
Total-loss claimants are paying an average of $8 more out-of-pocket between the two quarters.
Claims for Repairable Cars Seeing Shorter Waiting Periods
However, waiting periods either shortened among claims for cars that could be repaired.
For those claimants, the average time it took for a claimant to receive settlement terms for their vehicle dropped from 5.8 days in the first quarter to 5.3 days in the second quarter.
The average time it took for a claimant to receive the settlement itself dropped from 14.5 days in the first quarter to 14.1 days in the second quarter.
Policyholders are also paying less out-of-pocket for claims on repairable cars, with the average out-of-pocket expense shrinking by $38. Those expenses, which typically include the deductible and vehicle rentals, now average $461.
Firm Offers Tips for Insurers, Motorists
“Our findings highlight how important it is for insurers to efficiently manage their customers through the appraisal process,” Jeremy Bowler, the firm’s senior director the insurance practice, said in a statement
Bowler highlighted a 30-point gap between the overall satisfaction levels of claimants who had some kind of contact with their insurer during appraisals and those who didn’t interact with an insurer or agent during that stage of the claim process.
Last month, J.D. Power released its report on consumer satisfaction with auto insurance companies, finding that overall satisfaction levels sunk by 10 points compared to 2012, when satisfaction was at an all-time high. Along with its report, the firm also released a checklist for motorists following a crash:
–Call the police for any auto accident that results in more than minor damage to a vehicle (more than $500 is a suggested figure).
–Call 911 if someone involved in the incident has been injured.
–Take down the names and addresses of individuals involved; the accident location; the make, model and plate number of the vehicle(s); names and contact information of any witnesses; and notes of any injuries.
–Always get a copy of a police report when involved in a multiple-vehicle accident.
–Ask the police to file an accident report or at least an incident report, so there’s a record to show your insurance company.
–Contact your insurer or agent as soon as possible after the incident, even if the other party is at fault. Your insurer will be better able to protect your interests.
–If possible, contact your insurer or agent from the location where the damage occurred.
–Keep records of all calls regarding the incident.
–Take photos of damage to your vehicle, even with a cell phone.
–If you have questions about your adjustor’s appraisal, contact your insurer or agent directly.