JD Power 2012 West Region Auto Insurance Study: Companies Rated Below Average

This blog post will review the remaining 4 lowest rated companies, each rated at 2 power circles (the rest) for Overall Customer Satisfaction, of the eleven companies included in the JD Power 2012 auto insurance study, covering the states in the Western part of the USA. My first blog post for this regional study, analyzing the ratings of the companies considered among the best in the West region, notes the states included in the study. I’ll note the specific states again in my next post, which will summarize the West region study results.

Your inclination may be to want to know the names of the lowest rated companies in this regional study, so you can avoid them, or to find out if your auto insurance company is one of the lowest rated companies. When you look at the study results beyond the power circle ratings, you learn some of the highest rated companies are not so good, and some of the lowest rated companies are not so bad. The information in this blog post will help you decide if you should consider insuring with any of these companies ranked at the bottom of this study.

State Farm was the award winner of the study, scoring 837 out of 1,000 possible points. The lowest scoring company is Nationwide, with 768 points out of 1,000 points. Converting the scores to a percentage, where a perfect score would be 100%, State Farm is at 83.7%, and Nationwide is at 76.8%. If these were letter grades in school, State Farm earns a “B” and State Farm earns a “C.” There is less than a 7% difference in the scores between the study award winner and lowest ranked company. A “C” grade is not a failing grade.

Don’t think the lowest ranked companies are horrible because they are in last place. With any list, some companies have to rank at the bottom.

What if there were 10 companies in the survey, scoring 990, 980, 970, 960, 950, 940, 930, 920, 910, & 900. The company scoring 900 out of 1,000 points would rank last, but 900 out of 1,000, or 90%, is a great score. Of course, this example is from a fantasy world where all the insurance companies provide great service. In the real world, most insurance companies are average performers, with most of the best companies not being all that great. State Farm scored 83.7% and Nationwide scored 76.8%. Would you be okay with “C” rated service if Nationwide had a much better price for you than State Farm, for the same coverage? Would you pay more for “B” grade service?

Consider the companies below if they have a really good price for you. Otherwise, you can get a good price, and the likelihood of better service, with the other companies rated in this study. You can’t depend on the highest rated companies to have a good price for you, but pricing is considered in the study, so you don’t want to think you have to pay more for the companies rated as having the highest customer satisfaction.

8. Farmers Auto Insurance

Farmers scored 787 points on the 1,000 point scale, 23 points below the study average, and it is the highest scoring company receiving the lowest 2 power circle rating (the rest) for Overall Customer Satisfaction.

Farmers received 3 power circles (about average) for Contacting the Insurance Company. In the categories of Policy Offerings, Billing & Payment, and Pricing, Farmers received 2 power circles (the rest).

9. Safeco Auto Insurance

Safeco rated 786 points out of 1,000, and only one point below Farmers.

Safeco, the same as Farmers, rated about average (3 power circles) for Contacting the Insurance Company, and 2 power circles for Pricing, Policy Offerings, and Billing & Payment.

10. Liberty Mutual Auto Insurance

Liberty Mutual scored 784 out of 1,000 points, only 3 points below Farmers, and 26 points below the regional average.

Liberty Mutual rated 2 power circles (the rest) in all four categories of Pricing, Billing & Payment, Policy Offerings, and Contacting the Insurance Company.

11. Nationwide Auto Insurance

Nationwide scored 768 out of 1,000 points, and is the lowest scoring of the lowest rated (2 power circles) companies, ranking last in the survey.

Nationwide also rated 2 power circles in all 4 categories of Billing & Payment, Pricing, Contacting the Insurance Company, and Policy Offerings.

Nationwide scored 16 points below Liberty Mutual, the second to last ranked company, and 19 points below Farmers score in this survey.

Per the study results, I think it is fair to say Farmers, Safeco, & Liberty Mutual all have about the same level of customer satisfaction, since their numerical scores are within a few points of each other. The customer satisfaction for Nationwide auto insurance customers in the West region is somewhat less.

Nationwide scored 42 points below the regional average of 810 points. Keep in mind this is 42 points on a 1,000 point scale, which is only a 4.2% variance. The customer satisfaction ratings in the JD Power studies are useful, but customer satisfaction is very subjective, and hard to measure objectively.

Don’t rule out Nationwide, or any of the other companies, until you get a price quote, and experience their customer service yourself. A lot of customer satisfaction for auto insurance can be controlled by a knowledgeable agent, setting proper expectations and guiding their customers through the sometimes customer-unfriendly rules & processes used by insurance companies.

My next blog post will summarize the results of the West region study, and give you some shopping tips. Please be aware, if you are insured with any of the companies rated in the West region study, and do not live in the Western United States, these study results do not apply to you, and these companies may have better or worse JD Power ratings in the regional study covering the state you live in. Keep following my blog until I get to the regional study including your state.

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Do you live in the Western United States, and insure your vehicles with Farmers, Safeco, Liberty Mutual, or Nationwide? How satisfied are you with their customer service? Tell me about it. Comment on my facebook page. Follow me on Twitter for important insurance consumer news and new blog entries at CarInsWatch.