More than half of customers have little trust in their auto insurers, J.D. Power

According to the J.D. Power 2024 U.S. Auto Insurance Study, customers who have a high level of trust in their auto insurer show increased customer satisfaction and brand loyalty. As U.S. auto insurance rates rise–they are up to an average of 11.2% so far this year–the study reports that these price hikes do not necessarily decrease customer satisfaction, so long as customers show a high level of trust in their carriers.

"Auto insurers are in a tough position right now," said Breanne Armstrong, director of global insurance intelligence at J.D. Power, in a press release statement. "With repair costs still rising—and with more than 20% of vehicles involved in collisions now considered total write-offs—insurers are still losing money, despite passing along huge price increases to their customers. What's interesting in J.D. Power data is that even though high premiums negatively affect customer satisfaction, those negative influences can be offset by high levels of trust that insurers will come through when they are needed."

The study, which was redesigned for 2024, measures customer satisfaction based on seven categories, in order of importance: level of trust; price for coverage; people; ease of doing business; product/coverage offerings; problem resolution; and digital channels. This study was fielded from August 2023 through April 2024 and received over 40,000 responses from U.S. auto insurance customers. 

Of the customers in the high-trust category, 90% said they are likely to renew their policy with the same insurer, and only 30% of customers in the low-trust category responded the same. Using a 1,000-point scale, the average overall satisfaction score among auto insurance customers with the highest level of trust is 917 points. The average score for those with the lowest level of trust in their auto insurer is 491.

The study also found that 51% of customers have low-trust in their carriers. The lowest trust scores are found in regions where rate increases are highest, with Florida ranking first for lower trust in consumers' insurers. 

The study also includes a category that measures customer satisfaction and usage-based insurance (UBI) offerings, with a list of insurers and their scores by region. The highest overall for satisfaction with UBI products was Nationwide, which received a score of 842. 

A recent survey from the car insurance savings app, Jerry, reveals that consumers are more willing to enroll in a telematics or UBI program based on data privacy concerns and transparency of the program.

The survey data, based on responses from over 1,300 participants who own and drive a vehicle, shows that 78% of drivers are uncomfortable or "extremely uncomfortable" with companies collecting data, like location history, from their automobiles. 

Most, 96%, of all drivers said that the owner of a vehicle should own all of their own data, and 81% said they would be uncomfortable if automakers or data brokers shared their vehicle data with law enforcement without prior consent. Only 3.5% of respondents said they fully trust data brokers with their vehicle data and a majority, 79%, do not trust data brokers with this information at all.

"Our survey found that while many are open to sharing their driving data for perks like lower premiums, the vast majority are uncomfortable with the thought of their data being collected and shared without their explicit consent," said Neima Shahidy, vice president of products and partnerships at Jerry, in an email to Digital Insurance. "Consumers want to stay informed and in control. Programs built to avoid these concerns are the ones that will earn their trust and loyalty."