How well auto insurance providers are able to handle claims can make or break the relationship with their customers — at least that’s the finding from J.D. Power & Associates’ 2013 Canadian Auto Claims Satisfaction Study.
The inaugural study measures customer satisfaction with the claims experience when it comes to physical vehicle damage and 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.
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,” remarked Jeremy Bowler, senior director of the insurance practice at J.D. Power. “If that initial call goes well, odds are good that the claims process will go well, which 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 claimants who do not receive this explanation. While a majority (87 per cent) 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.
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.
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 per cent 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.
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.”
When it came to regional findings, overall customer satisfaction with the auto claims experience among Canadian provinces included in the study averaged 787 out of 1,000. Satisfaction varied greatly by province, ranging from a high of 840 in Quebec to a low of 753 in Manitoba. Among other provinces, Ontario averaged 800; Alberta 770; British Columbia 767; and Saskatchewan 760.
The 2013 Canadian Auto Claims Satisfaction Study was based on responses from 2,458 auto insurance customers in Canada who settled an auto insurance claim within the past 18 months. The study excluded 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.
