J.D. Power 2025 Auto Insurance Study Highlights Customer Satisfaction and Industry Recovery
J.D. Power's 2025 U.S. Auto Insurance Study reveals that 38% of auto insurance policyholders express dissatisfaction with their insurers, which correlates with lower renewal rates and increased likelihood of shopping for better deals. The study evaluates customer satisfaction across seven key dimensions: trust, pricing, personnel, ease of business, product offerings, problem resolution, and digital channel effectiveness, emphasizing the importance of a seamless multichannel experience for policyholders.
Customers with higher premiums, longer tenure, and multiple policies with the same insurer are surprisingly less inclined to renew, with only 51% definitely planning to do so. While low rates attract new customers, retention hinges more heavily on service quality and positive claims experiences. The report also notes a record 57% of customers actively shopped for new policies in the past year, highlighting competitive pressures on insurers.
Overall, customer satisfaction has declined slightly, scoring 644 out of 1000 in 2025, reflecting ongoing challenges in balancing rate increases and service delivery. The study spans 11 U.S. geographic regions and includes usage-based insurance (UBI) as a category, offering insights into how policyholders perceive modern auto insurance products.
In the claims domain, an unprecedented 22 insurers, including six of the largest providers, received low marks (C- or lower) from collision repairers for their claims handling practices, indicating industry-wide challenges in claims quality and customer service. None of the top ten largest insurers achieved grades higher than C+, while over 60 smaller insurers outperformed them in this area.
From a financial perspective, the U.S. private auto insurance sector is recovering from adverse underwriting results seen in 2022. S&P Global Market Intelligence reports a net combined ratio improvement to 95.3% in 2024, significantly better than the peak of 112.2% in 2022. This combined ratio aligns with the best annual performance since 2013, suggesting enhanced underwriting discipline and pricing strategies benefiting the sector.
These findings underscore the importance of insurers balancing competitive pricing, customer service excellence, and claims handling efficiency to retain customers amid a highly dynamic market. Focused operational improvements in digital experiences and claims management appear central to improving customer satisfaction and loyalty moving forward.