Auto Insurance Refunds: Who's Giving Back And How To Get It

Auto insurance companies have been ranked based on their customer service, claims handling, and discounts. While some companies have been praised for their low rates and high customer satisfaction, others have been criticised for their high rates and poor customer service.

USAA, for example, has been ranked as the top car insurance company by U.S. News, with the most affordable premiums, more than 35% below the national average. Auto-Owners, which is available to the general public, is ranked second for customer service. Erie Insurance Group is ranked first overall by Consumer Reports, with a total score of 72 out of 100.

Discounts and savings

• Multi-policy discount: Also known as a "bundle and save" discount, this is offered when you have multiple policies with the same company, such as home and auto insurance.
• Multi-vehicle discount: Insuring multiple vehicles with the same company can often result in a discount.
• Good student discount: Students who maintain a certain grade point average or are on the honour roll may be eligible for a discount.
• Safe driver discount: If you have a clean driving record with no accidents or violations, you may qualify for a discount.
• Defensive driver training discount: Completing an approved defensive driving course can sometimes lead to a discount on your insurance premium.
• Loyalty discount: Some companies offer discounts to customers who have been with them for a certain number of years.
• Payment history discount: Paying your premiums on time and in full can result in a discount.
• Paperless discount: Choosing paperless billing and online payments can sometimes lead to a small discount.
• Advance quote discount: Getting a quote and enrolling before your current policy expires can sometimes result in a discount.
• Low mileage discount: If you don't drive a lot of miles each year, you may be eligible for a reduced rate.
• Safety feature discounts: Having certain safety features in your vehicle, such as anti-lock brakes, airbags, or a security system, can often lead to a discount.

In addition to these common discounts, some companies offer more unique discounts. For example, USAA offers a military on-base discount, while Erie Insurance offers a reduced usage discount. It's always a good idea to ask your insurance agent or company representative about any discounts you may be eligible for, as this can help you save money on your auto insurance premium.

Customer service

• USAA: USAA is consistently ranked as one of the top auto insurance companies, and their customer service is a key reason for this. USAA is known for its friendly and knowledgeable staff, who are always ready to assist customers with any queries or concerns. They offer multiple ways to get in touch, including phone, email, and online chat. USAA also has a fast and efficient claims process, which can be a huge relief during stressful times.
• Auto-Owners: Auto-Owners Insurance is another company that excels in customer service. They have a strong focus on customer satisfaction and are known for their helpful and responsive staff. Auto-Owners offers a variety of ways to get in touch, including a 24/7 customer service hotline, email, and online chat. Their website also has a comprehensive FAQ section that can answer many common queries.
• Nationwide: Nationwide is known for its customer-centric approach, and their customer service reflects this. They offer a range of communication channels, including phone, email, and online support. Nationwide also has a dedicated mobile app that allows customers to manage their policies, file claims, and track their claim status. Their claims process is generally praised for being straightforward and efficient.
• State Farm: State Farm is a well-known insurance company with a strong reputation for customer service. They have a large network of local agents who can provide personalized assistance and support. State Farm also offers multiple ways to file a claim, including online, through their mobile app, or by calling their customer service hotline. Their website also has a wealth of resources and tools to help customers understand their policies and coverage.
• Geico: Geico is known for its efficient and reliable customer service. They offer 24/7 support through phone, email, and online chat. Geico also has a user-friendly website and mobile app that allow customers to manage their policies and file claims easily. Additionally, Geico provides a range of online tools and resources to help customers understand their coverage and answer common queries.

When choosing an auto insurance company, it's essential to consider their customer service offerings. The companies mentioned above have consistently received positive feedback for their responsiveness, efficiency, and overall customer satisfaction. Remember to research and compare different companies to find the one that best meets your needs and expectations.

Claims handling

USAA, exclusively serving military personnel, veterans, and their families, excels in claims handling. Surveyed customers express complete satisfaction with USAA's claims process, from ease of filing to resolution. USAA also ranks highly in customer service, making it a top choice for those seeking a seamless and supportive experience when filing auto insurance claims.

Auto-Owners Insurance, available in 26 states, achieves impressive claims handling scores. In J.D. Power's studies, Auto-Owners ranks first in Florida and above average in other regions. Their claims process is further bolstered by high customer satisfaction ratings from the Better Business Bureau and a low volume of complaints relative to their size. Auto-Owners offers a wide range of coverage options and add-ons, enhancing their claims handling capabilities.

Nationwide, the third-ranked company in claims handling, receives positive feedback from customers. Fifty-nine percent of respondents indicate complete satisfaction with how Nationwide resolves their claims. The company also offers a range of coverage options and add-ons, contributing to a positive claims handling experience.

State Farm, the fourth-ranked company in claims handling, demonstrates its commitment to customer satisfaction in this area. Over half of the surveyed respondents express a likelihood of renewing their policies, reflecting their satisfaction with State Farm's claims handling. The company's rates are also competitive for those with less-than-perfect driving records.

American Family Insurance, available in 16 states, ranks fifth in claims handling. The company receives positive feedback for its ease of contact and responsiveness. American Family also offers a range of coverage options and discounts, enhancing their overall claims handling performance.

Erie Insurance, operating in 12 states and Washington, D.C., ties for ninth place in claims handling. They excel in providing competitive rates, particularly for teen drivers, and have a strong showing in customer satisfaction. Erie's claims handling is further bolstered by their wide selection of discounts, making them a cost-effective choice for many customers.

Customer loyalty

Auto insurance customer loyalty is declining. According to a 2019 analysis by J.D. Power, the rate of auto insurance loyalty, as measured by those customers who will "definitely renew" their policy with their current carrier, has fallen to 48% from 59% in 2004. This constitutes a 27% drop in auto insurance consumer loyalty.

There are several reasons for this decline in customer loyalty:

• Advertising: In 2018, over $6 billion was spent on advertising in the auto insurance market, with consumers being bombarded by ads on television, billboards, and even at college football games. This has likely influenced consumers to shop around and switch providers.
• Ease of Shopping: With the rise of digital channels, shopping for a quote can now be done quickly and conveniently from home, making it easier for customers to switch providers.
• Rising Costs: The cost of auto insurance has been increasing, with rates rising twice as fast as the median household income across the U.S. over the past decade. This has led to auto insurance taking up a larger share of consumers' wallets, impacting their loyalty to existing carriers.
• Price Optimization: Some auto insurance companies are accused of using a tactic called "price optimization" to charge loyal customers higher premiums. Customers may be offered loyalty discounts, but these may not make up for the previous rate increases.
• Customization of Insurance Coverage: The introduction of tools such as usage-based insurance (UBI) was intended to provide more transparent and personalized pricing for consumers. However, there is a growing disconnect between personal rate factors (such as driving fewer miles) and market factors (such as the rising cost of repairs or medical costs) that are beyond the control of consumers. As a result, customers with stable rates are less likely to shop around, while those experiencing variability in their rates are more likely to switch providers.

Despite the decline in customer loyalty, there are still auto insurance companies that have managed to maintain high levels of customer loyalty. According to J.D. Power's Quarterly Insurance Shopping LIST Reports for Q1 2024, the top auto insurance companies for customer loyalty include NJM, USAA, Erie Auto Insurance, Mercury Auto Insurance, and The Hanover. These carriers have either competitive prices, well-regarded customer service, or both.

To improve customer loyalty, auto insurance carriers need to focus on enhancing the customer experience and developing more nuanced strategies that go beyond big ad campaigns or clever product offerings.

Affordability

NerdWallet's analysis found that Geico is the best option when it comes to affordability, with an average rate for full coverage insurance of $1,303 per year—the lowest out of their list of best car insurance companies. Geico also stands out for its wide variety of discounts and the ease of managing policies online.

U.S. News & World Report's analysis found that USAA and Auto-Owners are the two companies with the most affordable premiums, with USAA's average annual rate being $733 lower than the national average. However, USAA policies are only available to military members, veterans, and their families, so Auto-Owners may be the best option for those who don't qualify for USAA.

According to Consumer Reports, USAA is also the best option in terms of pricing, with a score of 68/100. While there are still stories of USAA customers experiencing large rate hikes, their premiums are consistently below the national average.

To save money on auto insurance, it's recommended to increase your deductible, adjust your coverage, and look for potential discounts. Bundling your auto insurance with other types of insurance, such as homeowners or renters insurance, can also help lower your rates. Additionally, maintaining a good credit score can positively impact your auto insurance rates in states where credit is a rating factor.

Frequently asked questions