How to Avoid the Worst Auto Insurance Companies in America
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UPDATED: Jul 8, 2021
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Like anything else, the best or the worst in any category can be vastly different depending on whose opinion you have solicited. If a customer is happy with the service a particular company has provided, or they have treated him or her especially well in a time of need, that customer will continue to recommend the company no matter how others may feel about it.
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Insurance companies are judged somewhat differently than other types of services. A particular insurance provider may offer the most competitive rates and coverage, but if the company falls short of fulfilling expectations when it comes time to file a claim, the company will be judged harshly.
Avoiding the bad companies is mostly a matter of comparison shopping to find companies that are both highly rated and provide the kinds of services for which you are looking.
Customer Satisfaction Surveys
J.D. Power and Associates is a marketing and global information service company.
Since 1968, J.D. Power has provided customer satisfaction studies, marketing research, and forecasting across a number of industries and key business sectors.
J.D. Power and Associates is a division of publishing giant McGraw-Hill.
For more than 40 years, J.D. Power has listened to the voices of consumers everywhere, recording their perceptions and opinions about a variety of products and services. J.D. Power polls literally millions of consumers each and every year.
The results are cutting-edge studies and surveys that provide the most up-to-date information possible to its many industry clients.
Each year the J.D. Power group initiates several surveys regarding the insurance industry, and in particular auto insurance. J.D. Power not only determines customers’ satisfaction levels with car insurance providers in general, but this year began a new survey to determine which auto insurance companies’ websites are the best suited for online shoppers.
Consumers are asked to rate each insurance provider in five important areas: policy offerings, price, the effectiveness of local agents, the friendliness and efficiency of call center representatives, and the overall appeal of a company’s website.
Summarizing the results of the 2009 J.D. Power survey, the Christian Financial website gives consumers their take on the five worst performing companies.
The number five worst auto insurance company overall was Travelers.
Travelers, like the four other bottom-of-the-barrel companies, was awarded only two out of five circles for overall customer satisfaction. Good customer contact and a pleasing website were the only positive notes for this insurance provider.
Moving toward the bottom, the next company on the list was Commerce, which ended in a virtual tie with Travelers. Commerce’s customers were dissatisfied with most every aspect of this insurance provider’s service.
Except for an increase in satisfaction with pricing, consumers in 2009 continued to express their displeasure with 21st Century. GMAC was another insurance provider near the bottom rung of the ladder for its customers’ many complaints and its generally poor customer service.
The honor of the worst of the worst in 2009 goes to AIG, earning low marks in every category surveyed. AIG’s customers appeared to be unhappy with just about every aspect of AIG’s products and services.
The Best of the Rest: Then and Now
Since our stated aim is to avoid the worst auto insurance companies in America, it would be helpful to be at least somewhat familiar with the best companies when it comes to the 2009 J. D. Power and Associates customer satisfaction survey.
In 2009, the number one auto insurance provider in the J.D. Power customer satisfaction survey was Amica Mutual.
By 2012, Amica had dropped to eighth place, ending a streak of more than ten years at the top of the J.D. Power list with perfect five circle ratings in every category. For 2012, the J.D. Power all-around five circle winner was the Hartford.
USAA also earned perfect scores for 2009, but was not included in the findings as USAA policies are only available to service members and not the general public. The same goes for several other private firms, including the New Jersey Manufacturers Insurance Co.
State Farm was a close second in 2009 but has dropped to 22nd out of 24 in the 2012 survey. Shelter Insurance, number three on the 2009 list, has dropped out of contention completely in 2012. Auto Owners is currently at number nine on the 2012 list, down five places from its fourth place ranking in 2009.
Erie Insurance, the fifth best insurer in 2009 has fallen to number 11 on the 2012 list. The bottom five on the J.D. Power list for 2012 were Progressive, Safeco, State Farm, Travelers, and USAA. While overall satisfaction with insurance services has been on the rise, these companies have all dropped in ratings over the last several years.
While rankings haven’t changed much for the 2010, 2011, and 2012 surveys, there are several notable changes in more recent J.D. Power surveys.
First, in the last several years, overall customer satisfaction has increased to reach all-time high levels. Auto insurers in general are making significant headway in providing a more positive customer experience.
In large measure this increase in customer satisfaction is directly related to the number of insurance customers that are now shopping online for their auto insurance needs. In fact, in 2012 J.D. Power commissioned its first ever auto insurer website satisfaction survey.
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Auto Insurance Websites
Even if an insurance provider is ranked well overall, if its website is not up to par, potential customers are likely to shop elsewhere for a new auto policy. Many of the largest U.S. auto insurance firms–nearly half of the top-ranked 24 providers–do not as of yet have interactive websites.
The 2012 J.D. Power study shows that almost 75% of insurance shoppers visit at least one company website. Thirty-four percent of shoppers told J.D. Power and Associates that they prefer to buy their auto policies online.
Of those shoppers who have a positive experience on a company’s website, 63% are likely to continue shopping with that company.
On the other hand, shoppers who were disappointed with a company’s site were far less likely to continue shopping with the company–only 14%. Out of 1000 possible points, those surveyed who were delighted with a website scored the company at 900 and above.
Scores for car insurance companies whose websites were unsatisfactory averaged 550 points or less.
Half of the group who were delighted with a website indicated that they would recommend the company to their friends and associates, while of the disappointed shoppers only 2% said the same.
For this study, satisfaction was measured by five major factors: the ease of navigation, the clarity of the information on the site, appearance, speed, and the variety of information services available on the website.
Of the two dozen companies rated, the worst websites were those of Liberty Mutual, Progressive, and Nationwide.
The companies with the best overall websites were Esurance, Allstate, Geico, and Travelers. These sites all scored well in the 2012 customer website satisfaction survey areas.
The AAJ Ten Worst Insurance Companies
The American Association for Justice, AAJ, recently released a study summarizing the results of thousands of hours of investigative research used to determine the worst insurance companies in America.
The AAJ reviewed thousands of case files, court records, and documentation from a number of governmental agencies including the FBI and the SEC, Securities and Exchange Commission. They also sought the direct testimony of insurance agents and adjusters.
Their list of the worst insurance companies in America includes a variety of different insurance types: homeowners and auto insurers among others, including life, health, and disability insurers.
At the top of the AAJ list is the Allstate insurance group. Allstate is considered to be the worst of the worst for its continuing efforts to put profits over the needs of its policyholders. Allstate has enjoyed record earnings in recent years, showing a profit of more than 50 cents on each premium dollar that customers spend.
Number two, Unum, has a long history of unfairly denying and delaying claims. Unum has for years been under regulatory scrutiny and investigated by the media.
AIG is a major auto insurer. Listed above as the worst on the J.D. Power customer satisfaction survey, AIG has recently come under fire for potential corporate fraud amounting to billions of dollars. Customer claims abuses are nothing new to this insurance giant.
State Farm is number four on the AAJ list, most notably for its long-standing practice of delaying and denying the legitimate claims of its many policyholders. These abhorrent business practices were quite apparent in several high-profile cases, including the aftermath of Hurricane Katrina.
Following State Farm on the list is number five Conseco, then WellPoint, Farmers Insurance, United Health, Torchmark, and finally Liberty Mutual.
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