Car insurance premium hikes in Canada are beginning to take a toll on how drivers regard their auto insurance providers, according to J.D. Power’s 2019 Canada Auto Insurance Satisfaction Study.
Although the study does not gauge consumers’ opinions on their premiums, given the rising cost of auto insurance rates nationwide while claims frequencies are stabilizing in some regions, it’s not difficult to understand why drivers may take a dim view of the auto insurance industry. The national average premium was up by $298 in 2018, the report states.
What is also a major factor in terms of motorists’ perspectives is the clarity and transparency auto insurers provide when initiating a premium hike, and how well consumers understand what they are paying for and what they get in return.
The annual study measures consumers’ overall satisfaction levels with their auto insurers across five factors, including what drivers think of their insurer’s products and policy offerings, premiums, billing and payment, non-claims interactions, and the claims process. Insurers are ranked in four regions: Alberta, Atlantic Canada, Ontario and Quebec. Each insurer’s ranking is based on a 1,000-point score.
Ontario drivers rank The Co-operators in the No. 1 spot with a score of 809 points. The Personal (a subsidiary of Desjardins General Insurance) ranks second with 798 points.
In the 2018 study, The Personal was in the No. 1 spot and The Co-operators ranked second. It’s conceivable The Personal’s dip in the 2019 rankings is because it hiked its auto rates three times in 2018 (totalling 19.38% in that year), whereas The Co-operators only raised its auto rate in 2018 by 0.88%.
Alberta drivers rank both the Alberta Motor Association and The Co-operators as the best auto insurers in the province, each with a satisfaction score of 781. It is the sixth straight year The Co-operators are at the top of Alberta’s list. Johnson Insurance placed second with 776 points.
However, it’s worth noting of all four regions in the J.D. Power study, overall customer satisfaction is lowest in Alberta (754 points). Perhaps that comes as no surprise, since drivers in Alberta absorbed the highest hike in auto insurance costs ($326), followed by drivers in Ontario ($311), Atlantic Canada ($286) and Quebec ($213) in 2018.
In Atlantic Canada, The Co-operators also top J.D. Power’s list with 820 points, followed by Intact Insurance with 799. In Quebec, where customer satisfaction is highest with an average score of 817, The Personal is in the top spot with 836 points, followed by SSQ with 834.
The report also notes nearly two-thirds (62%) of customers who can access their policy online and were contacted by their insurer during the past year intend to keep their business with their current insurer and recommend it to others. In stark contrast, fewer than half (45%) of customers who neither had personal contact nor access to their policy plan to continue with the same insurer and are not likely to recommend it.
“There are multiple ways [car insurance companies can] help customers realize the value of their policy,” says Tom Super, Director of the Insurance Practice at J.D. Power. “Providing easy access to policy information via digital channels and having at least one annual touch point to review customers’ changing needs can go a long way in increasing satisfaction and loyalty.”
Drivers should also not hesitate to shop around for the best auto insurance premium they can find.