Why Most People Don't Trust Their Car Insurance Companies
Most drivers say they have little faith in their car insurance company — and that lack of trust may stem from rising costs.
According to a new J.D. Power report, only 15% of auto insurance customers say they have high levels of trust in the company covering their vehicle. Another 34% have “mid levels” of trust, while 51% report having little trust in their car insurance provider.
People may rely on insurance companies when things go wrong, but that doesn’t mean customers trust them. No insurers made the cut in a recent Morning Consult Intelligence survey highlighting the most trusted brands of 2024, which features companies like UPS, Amazon, The Home Depot and Visa.
But certain trends appear to be doing damage to whatever goodwill customers did have. J.D. Power researchers tell Money that survey respondents demonstrated steadily rising trust in auto insurance companies from 2017 to 2022. Trust in insurers dipped slightly in 2023, and then it “dropped dramatically” in the 2024 J.D. Power survey, a representative explains.
These falloffs occurred at the same time customers were being hit with steep increases in car insurance prices. Overall, the data indicates that jacking up drivers' premiums without explanation is a surefire way to upset customers and raise the level of distrust.
“The lowest trust scores are in regions with the largest proportion of insurer-initiated rate increases,” the J.D. Power study states. “Florida, where the incidence of rate increases is highest, also has the highest percentage of customers (55%) with low levels of trust.”
Car insurance prices are finally slowing down
Auto insurance costs have soared nationwide in recent years. In 2022, the average full-coverage policy cost $1,633, then leapt to $2,019 in 2023, according to data from the insurance marketplace Insurify.
The average will hit $2,160 this year, Insurify estimates. That’s an increase of over $500 in just two years.
Price increases are finally easing, however. The Consumer Price Index, which tracks inflation on a wide range of goods and services, shows that while auto insurance costs increased 20.3% over the past 12 months, prices actually dipped 0.1% from April to May.
That might not be enough for car owners to regain trust in their insurance providers, but it’s a start.