How do customer satisfaction ratings affect car insurance companies?

Car insurance satisfaction ratings are important to consider when looking for an auto insurance company. You should be careful with your research however, as some companies customer satisfaction ratings aren't legitimate.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jan 22, 2021

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Here's what you need to know...

  • Customer satisfaction ratings are important, but you should also consider things such as price, company stability, and policy options when choosing a car insurance company
  • Be careful about a company’s claims of excellent customer satisfaction ratings; sometimes such claims are biased and not founded on legitimate surveys
  • Independent companies such as the Insurance Information Institute conduct surveys to determine if a car insurance company is doing well in various areas, including customer satisfaction
  • Make sure to do adequate research about all the aspects of a car insurance company before choosing one from which to buy an insurance policy

Car insurance companies often claim that customer satisfaction surveys rate their services higher than any other company. The question is: Do car insurance company customer satisfaction ratings mean anything?

The truth is that customer satisfaction ratings should have some impact on your decision to choose a particular company.

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The Science Behind Customer Satisfaction Ratings

The first thing that you have to understand when you hear a car insurance company sing its own praises is that unless it cites an unbiased source such as the Insurance Information Institute, J.D. Power and Associates, or other similar companies, then it isn’t talking about scientific results.

Many car insurance companies offer a survey where a computer randomly selects people who visit the car insurance company website and request that they answer a few questions for the survey.

There is no specific criteria for taking the survey, such as being male or female, an older driver versus a younger driver, a long-term customer versus a new customer, and so on.

The customer is asked a few questions on how they feel about the company and then the results are added to other results in the system.

The results are somewhat skewed because only current customers of the insurance company are asked to take the survey, which typically means that there is already a satisfied customer in the place.

In addition, these types of surveys seldom leave room for a negative opinion about the company in question.

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Finding Customer Satisfaction Ratings that Count

 

Just because most of the surveys conducted by the car insurance companies aren’t scientific doesn’t mean that such surveys do not exist. Each year the Insurance Information Institute conducts surveys based on several criteria, including customer satisfaction.

Several entities pride themselves on providing accurate information about car insurance companies.

They typically conduct independent studies to determine if a company is doing well regarding price, products, and customer served, all from their current and former customer’s point of view.

The difference between these surveys and the ones that you see from your car insurance company is that they ask more specific questions, such as your age, gender, and where you live which helps them to determine how similar people view the insurance company.

When the results of the survey are published, all of this distinct information is provided.

The companies providing the results have no monetary interest in seeing one company come out ahead of the other.

What this means for you is that, if you see a commercial from a car insurance company stating that the III’s or the NAIC’s study shows that they are top rated in customer satisfaction, and have the best auto insurance reviews, then you should sit up and take notice.

These results are not tallied by the insurance company but by independent groups!

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Criteria for Selecting a Car Insurance Company

So, should customer satisfaction ratings be taken into account when looking for the best car insurance company? Absolutely! However, you should also consider a number of other things, including:

  • Price
  • Financial stability of the company
  • Age of the company
  • Knowledge of the staff
  • Variety of products offered
  • Types of discounts offered
  • In which states they are available

Some of these criteria are a given, but you may be wondering why you should care in which states their insurance is available.

The truth is that if you move to another state, and you love your insurance company, but you don’t know in advance if it is available in your new state, then you could end up having to switch insurance companies.

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