2016 U.S. Auto Claims Satisfaction Study: Use of Technology Rises in Insurance Claims Process

BY JOSEPH DOBRIAN

Technology may ease the auto insurance claims process, but it cannot fully replace humans, suggests the J.D. Power 2016 U.S. Auto Claims Satisfaction Study.SM As in last year’s study, satisfaction with the auto insurance claims process is lower among Gen Y customers (those born between 1977 and 1994) than among customers in any other age group, but Gen Y satisfaction levels are rising. Indeed, customer satisfaction is rising in all age groups, according to the study, except Gen X (those born between 1965 and 1976). Overall satisfaction among Gen Y customers averages 844 on a 1,000-point scale in 2016, up from 827 in 2015. The 17-point increase among Gen Y customers helps lift the overall industry average to 860 from 857 a year ago. Pre-Boomers (those born before 1946) have the highest satisfaction at 912, followed by Boomers (born 1946-1964) at 878 and Gen X at 847. Gen X is the only age group to experience a decline in satisfaction from a year ago: down 8 points from 2015.


The study also reports that Gen Y is the largest generational group of auto insurance claimants, at 40%—up from 33% in 2015. Gen X remains stable at 20%, while the share of Boomers and Pre-Boomers is shrinking.

Auto insurance photo“Gen Y is a large and influential segment of the claims market, so it’s encouraging to see that insurance providers continue to focus on improving this generation’s satisfaction,” said Mark Garrett, director of insurance industry analytics at J.D. Power.The U.S. Auto Claims Satisfaction Study measures customer satisfaction with their most recent automobile claim. Depending on the complexity of the claim, claimants may experience some or all of the following areas measured in the study: first notice of loss; service interaction; appraisal; repair process; rental experience; and settlement.

Use of Technology Rises during Claims Process
Of the claimants surveyed for the 2016 study, 42% went online or used the telephone to check on their claim during the claims process, a rise of 5 percentage points from the previous year. However, the study finds that overall satisfaction is highest among customers who first contacted their agent when filing a claim (882), compared with among those who filed a claim directly through the insurer’s website (848). Overall, only 7% of customers prefer to use digital channels to report their claim.

“While technology offers a customer more options, what we find is that even when customers file a digital claim they still want to talk with someone to get an explanation of the process, what to expect along the claims pathway, and the timing,” said Garrett. “Even the younger generations, which are most comfortable using digital channels, still want to talk with someone. We see the biggest gains in satisfaction when technology is used as a complementary channel for receiving status updates.”

The study also finds that 80% of customers who purchased their policy through a local agent still called their agent first to report a claim or seek advice regarding one. Among customers who called their agent first, 64% say their agent reported their claim, while 20% were transferred by their agent to a call center and 16% were redirected. Overall customer satisfaction is 882 when the agent files the claim, but slips to 858 when the customer is transferred to a call center and to 824 when they are instructed to contact the call center.

Among claimants who are delighted with their claims experience (overall satisfaction scores of 900 or higher), 84% say they “definitely will” renew their policy and 83% “definitely will” recommend their insurer. Among displeased claimants (scores of 549 and below), only 12% say they “definitely will” renew and 7% “definitely will” recommend their current insurer. Among the two-thirds of customers who have renewed their auto insurance policy since filing a claim, 28% say their insurance premiums have increased.

The Hartford Tops Insurance Rankings
The Hartford ranks highest in auto claims satisfaction with an index score of 891—a 21-point improvement from 2015. The Hartford performs particularly well in the first notice of loss and service interaction factors. Erie Insurance (886) ranks second, followed by Auto-Owners Insurance (885), American Family (874), Amica Mutual (874), and Nationwide (874).

Consumer Tips
Based on the study, J.D. Power offers the following consumer tips:

  • While you’re looking for an insurer, ask your friends and family about how their insurer handles the claims process. Before you commit, ask the agent to describe the process. Ask what you can expect to happen; how and to what extent a claim will be paid; the time it will take; and the information you’ll need to provide.
  • If you have a claim or think you might have one, contact your insurer immediately. Make them aware of the situation so they can act as your advocate if necessary.
  • Keep your insurer’s contact information in your vehicle, in your home, and on your person.

About the Study
The 2016 U.S. Auto Claims Satisfaction Study is based on responses from 12,228 auto insurance customers who settled a claim within the past 6 months prior to taking the survey. The study excludes claimants whose vehicle incurred only glass/windshield damage or was stolen, or who only filed a roadside assistance claim. Survey data was collected from November 2015 through August 2016.

U.S. judge approves $15B settlement in Volkswagen emissions scandal

SAN FRANCISCO _ A federal judge in San Francisco has approved a nearly $15 billion court settlement of most claims against Volkswagen for its emissions-cheating scandal.

U.S. District Judge Charles Breyer signed the order Tuesday approving the largest auto-scandal settlement in the nation’s history.

Volkswagen admitted last year that about 475,000 VWs and Audis with 2-litre four-cylinder diesel engines were programmed to cheat on emissions tests. Under the settlement, owners of the affected cars have until Sept. 1, 2018, to decide whether to have the car fixed or repurchased. Volkswagen could start buying back the cars as early as next month if the owner submits a claim.

Most of the owners are expected to sell their cars back to VW after discovering they exceed U.S. emissions standards in real-world driving conditions. In addition to having their cars bought back, owners can each get cash payments of $5,100 to $10,000.

“The settlement is fair, reasonable and adequate,” Breyer wrote in his order, posted Tuesday morning by the court.

VW will pay attorney fees and costs, including up to $324 million in fees and $8.5 million in out-of-pocket costs.

A separate Canadian class-action lawsuit is before the Ontario Superior Court. The next hearing is scheduled for Dec. 19 and 20.

The U.S. settlement releases legal claims from most of the 2-litre VW owners, but it doesn’t affect larger 3-litre six-cylinder diesels, which also cheated on tests. The settlement also doesn’t end any claims against parts supplier Robert Bosch, which drew up the cheating software.

Judge Breyer gave preliminary approval to the settlement in July. The order says that 336,612 owners of 2-litre diesels have registered for the settlement and 3,298 have opted out.

VW must make payments available within 10 business days from Tuesday, according to the order.

Breyer wrote that the priority was to get the cars off the road as soon as possible, and the settlement accomplishes that. The polluting cars emitted as much as 40 times the allowable limit for nitrogen oxide, a gas that can cause human respiratory problems.

The settlement calls for the German automaker to spend up to $10 billion to buy back or repair the affected cars. The company will buy back the cars at the National Automobile Dealers Association clean trade-in price before the cheating was made public on Sept. 18, 2015.

Some owners have objected, saying they should receive the full purchase price of their vehicles. Mark Dietrich, an Audi owner from San Francisco, told the judge last week that Volkswagen played owners for fools and the settlement didn’t go far enough to compensate them for the company’s fraud.

But Volkswagen attorney Robert Giuffra encouraged Breyer to approve the deal, saying it was good for buyers and would help the company regain people’s trust.

The settlement also includes $2.7 billion for unspecified environmental mitigation and an additional $2 billion to promote zero-emissions vehicles.

The scandal has damaged Volkswagen’s reputation and hurt its sales. The company is still facing potentially billions more in fines and penalties and possible criminal charges.

The company said in April that it has set aside $18.2 billion to cover the cost of the global scandal, which erupted in September 2015 when the U.S. Environmental Protection Agency said Volkswagen had fitted many of its cars with software to fool emissions tests. Car owners and the U.S. Department of Justice sued.

– With files from The Canadian Press

CP3

Consumers are now able to buy a pre-owned vehicle from home, and have it delivered to their door.

Read more
What’s Truly Impacting Ontario’s Car Insurance Rates?

What’s Truly Impacting Ontario’s Car Insurance Rates?

Ontario car insurance rates continue to be a hot topic as Ontario drivers pay some of the highest rates in the country. The goals set out by the provincial government in 2013 to cut auto insurance premiums by 15 per cent continue to fall short.

LowestRates.ca, a comparison site for car insurance rates, investigated what factors are truly impacting car insurance rates in Ontario. The company’s data revealed, over the past year, a significant 9 per cent drop in the average insurance rate with an average premium of $2,353/year dropping to $2,154/year when Ontarians shopped around for a rate. To gain a better understanding of what affects drivers’ insurance rates, the company looked at numerous factors that play a role in rising or lowering individual rates.

According to LowestRates.ca data, here’s what impacts Ontario drivers’ insurance rates:

Your daily commute
For drivers commuting less than 9KM each way per day, your average rate is $2,296 per year. For people who commute 30-39KM each way every day, the average rate is significantly more at $2,806 per year.

You’re a millennial
Millennials are paying the most for car insurance. Those aged 16-33 years old pay an average yearly premium of $2,899.30 compared to Gen X (34-51 years old) who pay $2,289.00 and Boomers (52-70 years old) who only pay $1,999.08.

The age of your car
Thinking about buying a new car? If you’re looking to lower your rates, you may want to think again. A 2016 car will cost you a yearly average of $2,929 vs. a 5-year old car at $2,520.

Buying a 10-year old car will almost cost you $800 less per year than a brand new car at an average rate of $2,121. However, you may not be able to make that money back with car repairs and maintenance that come with an older car, so make sure you consider all expenses.

The family road trips
Similar to your commute, the mileage you put on your car per year can have an impact on how much you’re paying for insurance. So whether you’re commuting a long way to the office every day or taking family road trips across Canada, if you’re driving 20,000-24,999 KMs per year, you’ll pay an average of $2,529 compared to a driver who puts on less than 10,000 KMs per year who will only pay$2,111.50.

Your urban roots
Living in the big city is costly. On average, people who live in the GTA pay $2,584/year in car insurance, compared to those who live inLondon at $2,185 and Ottawa at $1,803.

“We think it’s important to inform Ontarians about what’s really impacting their car insurance rate,” said Justin Thouin, CEO of LowestRates.ca. “By looking at our data, we can help demystify what often seems like complicated premium calculations. In order to find the best policy, drivers need to pay attention to what influences premiums and compare rates annually.”

Comparison shopping is one factor that can have massive impact on car insurance rates. LowestRates.ca can compare up to 20 rates at once and can help Canadians find the best car insurance premium.

To view the full report ‘What Really Affects Car Insurance Rates in Ontario?’ visit: http://www.lowestrates.ca/reports/ontario-car-insurance-report-2016.pdf

About LowestRates.ca Data
The car insurance rate data was pulled from the LowestRates.ca client database, which generates over 100K+ quotes each year. It includes a sample of 5,402 Ontario drivers between July 2015 to July 2016.

About LowestRates.ca
Based in Toronto, ON, and founded in 2012, LowestRates.ca provides a free, independent service that helps consumers save time and money by comparing personal financial products from Canada’s leading financial institutions.

SOURCE LowestRates

U.S. self-driving sensor maker Savari announces partnership with China’s SAIC Motor

Savari Inc, a U.S. maker of sensors for autonomous driving, on Tuesday said China’s largest automaker, SAIC Motor Corp Ltd, has agreed to manufacture and distribute Savari’s sensors in China and some Southeast Asian markets.

California-based Savari did not disclose financial terms in a statement announcing the deal.

Savari makes V2X sensors that connect vehicles to other vehicles and infrastructure, a critical component for self-driving car functions.

The company also said a self-driving test project in Shanghai will equip more than 10,000 vehicles with Savari sensors.

(Reporting by Jake Spring and Norihiko Shirouzu; Editing by Christopher Cushing)

Hyundai recalls 74,000 cars in Canada and U.S.; sunroofs can fly into traffic

Hyundai is recalling more than 74,000 midsize cars in Canada and the U.S. due to the possibility for panoramic glass sunroofs to come loose and fly into traffic.

The recall covers certain Sonata midsize cars from the 2015 and 2016 model years, including gas-electric hybrids.

sonataThe South Korean automaker says the recall affects 11,114 cars in Canada and 63,000 cars in the U.S.

Hyundai says in government documents that a wind deflector anchor plate in front of the sunroof wasn’t bonded properly to the car. A loose deflector can detach and interfere with the roof as it closes. If the owner tries to force the roof closed, it can fly off.

The company says it has no reports of accidents or injuries due to the problem. But Hyundai had several reports of detached sunroofs in the U.S.

Dealers will repair the wind deflector anchor plate at no cost to customers. Owners in the U.S. will be notified by mail in December about when to take their cars in for service. Hyundai has not announced a timeline when Canadian owners will be contacted about repair.

 

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from ILSTV

You have Successfully Subscribed!

Pin It on Pinterest