Can’t Buy Me Love

They say money can’t buy you happiness and boy, were they right.  Anyone who’s ever spent a ludicrous amount of time on hold or dealt with an entirely unhelpful and unpleasant company representative while trying to file a claim or pay an insurance bill knows the value of competent and friendly customer service department. What you may not know is the extreme economic toll bad service can take on insurance companies.

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The newly released J.D. Power 2014 U.S. Insurance Shopping Study, an annual report on insurance shopping and purchase behavior in the insurance industry, found that auto policy holders are more likely to switch insurance companies after one or more negative interactions with their insurer than after a premium increase–that is, poor service, not price, drives auto insurance customers to shop around for new options. Some 30% of all auto insurance customers shopped for a new provider in 2013, and 36% of those that did actually ended up switching insurers. Conversely, of  customers who experience a

Graph courtesy of J.D. Power and Associates

Graph courtesy of J.D. Power and Associates

premium increase from a company they trust and find efficient, only 13% decided to shop for a new company–that’s less than half the rate of shopping among people who have had a poor experience. Insurers with high satisfaction scores retained a higher percentage of customers–among customers who are highly satisfied after one year, 81% opt to stay with their company, compared with 61% of consumers who are less satisfied.


This is not to say that price doesn’t factor in to the decision to switch companies. Eight out of ten customers select the lowest-price insurer, but often do not stay there long. While the average consumer can tolerate a low premium increase, hikes of more than $200 triple the rate of customers who decide to switch. Still, switching has its perks: customers saved an average of $300 when switching insurers in 2013, and the longer customers had been with their previous insurer, the greater the savings.  Not bad!


If you’re unhappy with the service you get from your current insurer, the team at Agency by the Mall can recommend one of our eleven excellent companies and save you a bundle to boot! Call about a quote and replace your negative experiences with positive ones.

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