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Switching Car Insurance Companies for a Lower Price?

Written by Michele Wilmonen. Posted in Research Last Updated: 02/09/2015

J.D. Power says that price alone may not keep you happy with your new car insurance company.

A study done by J.D. Power and Associates in 2014 found that consumers are actually more likely to be happy with their car insurance company if they are treated well, not just if they are saving money. So while you may not like that price hike that you just got from your current insurance company, you are more likely to still be happy with them if they treat you well, compared to a new insurance company that may be cheaper but treats you badly or indifferently.

Key Car Insurance Satisfaction Findings

Directly from J.D. Power and Associates, these are their key findings:

1) On average, customers saved $300 when switching insurers in the past 12 months. The longer customers had been with their previous insurer, the greater the savings when they switched carriers, likely because they had been experiencing rate increases. Customers who were with their prior insurer for 11 years or longer before switching save an average of $426 per year on their premiums, compared with $291 among those who had been with their previous insurer less than two years before switching. Moreover, satisfaction among customers who had been with their insurer 11 years or longer prior to switching is higher than among those who were with their insurer fewer than two years (855 vs. 820, respectively, on a 1,000 point scale).

2) Insurers that achieve high satisfaction scores by providing an outstanding onboarding experience also retain a higher percentage of those customers and have fewer new customers shopping. Among customers who are highly satisfied in their first year with their insurer (overall satisfaction scores of 850 or higher), 81 percent remain with that insurer and only 41 percent shop other insurers. Among customers with lower satisfaction in the first year (809 or lower), only 61 percent remain with that insurer and 61 percent shop.

3) Rate increases do not drive customers to shop as much as poor service does, as customers are tolerant of a certain level of rate increases. However, rate hikes of more than $200 can triple the rate of customers who switch insurers.

Car Insurance Companies That Satisfy

If you are just fed up with how your insurance company treats you and need a new one, try one of these 5 insurance companies that ranked the highest in the J.D. Power and Associates annual Insurance Shopping Study:

Per the results of the study, one of these 5 will make you a lot happier than the car insurance company that can quote you the lowest rate.

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Michele Wilmonen

Michele’s first introduction to insurance was working for a major insurance company as a file clerk and a mailroom supervisor in a regional office. She learned insurance directly from underwriters and claims adjusters from questions and also watching them do their job. Since then, she’s earned a number of insurance certifications from the Insurance Institute of America and also a Bachelor’s degree from the University of Idaho. She blogs at Car Insurance Guidebook.

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