J.D. Power Study Highlights Gaps in Digital Claims Experience for U.S. Auto and Home Insurers

U.S. auto and home insurers have increasingly promoted digital platforms for claims management over the past decade, yet a recent J.D. Power study reveals customers still frequently resort to offline channels during the claims process. Satisfaction rates are highest when claims workflows—from initial loss notification to ongoing status updates—are managed through insurers' mobile apps and websites. However, the study highlights that digital updates are delivered adequately only 22% of the time, prompting many customers to seek assistance via phone or email. The 2025 U.S. Claims Digital Experience Study emphasizes the importance of timely and sufficient digital status updates as a critical driver of customer satisfaction. Despite this, only 36% of auto insurance and 31% of homeowners insurance customers currently receive status updates via mobile apps, with the remainder often relying on less efficient communication methods such as calls, emails, or texts. This gap suggests room for insurers to improve digital engagement and reduce reliance on offline channels. Customer retention closely correlates with digital claims experience quality; 52% of customers rating their digital experience as "poor" or "just OK" are likely to switch carriers, whereas only 4% of those rating it "excellent" or "perfect" consider leaving. This indicates a direct link between digital experience effectiveness and brand loyalty. Analysts suggest insurers have significant opportunities to streamline claims processes by proactively anticipating customer needs and minimizing repetitive information requests. Concurrently, the Q3 Insurance Shopping Loyalty Indicator and Shopping Trends report shows an uptick in carrier switching to 4.5%, attributed partly to historic rate increases from 2021 to 2024. Despite increased shopping activity, customers often struggled to find more competitive premiums during this period due to widespread rate hikes across carriers. The average premium transferred during switching events exceeds $4,500, highlighting the financial impact of customer retention and churn. Overall, the findings point to an ongoing challenge for insurers to enhance their digital infrastructure to provide a comprehensive, seamless end-to-end claims experience. Emphasizing digital communication and updates could improve customer satisfaction, reduce churn, and strengthen competitive positioning in a shifting insurance marketplace.