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Some drivers regret switching

By Jay MacDonald ·
Tuesday, April 29, 2014
Posted: 6 am ET

Auto insurance customers who storm off to another carrier after receiving poor service are increasingly dissatisfied with their move.

That's the takeaway from the annual J.D. Power U.S. Insurance Shopping Study, which finds that while bad service remains the No. 1 reason why Americans comparison-shop and ultimately switch carriers, those who do so are increasingly disappointed in the impact on their auto insurance rates.

Why we switch

According to the survey, nearly one-third of all drivers changed auto insurance companies last year. Out of that group:

  • 28 percent bolted in reaction to poor service.
  • 13 percent fled a premium increase.

Poor service typically prompts more shopping around than modest rate hikes. But when the cost of coverage jumps by $200 or more, it triples the rate at which customers seek relief, J.D. Power says.

The survey finds that customers saved $300, on average, by switching carriers during the past 12

The biggest savings -- $426 per year, on average -- went to those who had been with their previous carrier the longest, and thus had absorbed the most premium increases.

Those who had been with their previous insurer for less than two years still saved $291, on average. But, not surprisingly, those in the $400 club were the happier campers, 855 happy points to 820 on the survey's 1,000-point scale.

Lofty expectations

So why the long faces?

Well, according to J.D. Power, our collective expectations of the riches to be had by switching carriers have been raised to unrealistic levels. Overall, our satisfaction with our new policies averages 821 points out of a possible  1,000, down from 828 in 2013.

The decline is in large part due to a 17-point drop in our perception of the cost savings -- the major driver of customer satisfaction.

"The insurance industry spends billions of dollars each year on advertising, and over the last seven years, many of those ads have tried to entice customers with big savings," Jeremy Bowler, senior director of the insurance practice at J.D. Power, says in a news release. "While switching to a new insurer usually results in savings, the ads make promises of savings that a growing number of new customers don't believe they've received."

Loosely translated, the savings, while real, just don't feel special enough.

The happy camp

Which auto insurers made us happiest in 2013? Here are the top 10, with satisfaction points:

  1. Erie Insurance: 843
  2. MetLife: 839
  3. State Farm: 839
  4. Ameriprise: 835
  5. American Family: 835
  6. The Hartford: 834
  7. Liberty Mutual: 833
  8. Automobile Club Group: 827
  9. Esurance: 826
  10. Auto Club of Southern California: 825

Thinking of trying your luck? Check out Bankrate's seven steps to switching.

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