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Which auto insurance companies are getting it right in the claims process?

Enduring the auto insurance claim process can be painful, if for no other reason than it means your car has been damaged.

The 2011 U.S. Auto Claims Satisfaction Study from J.D. Power and Associates underscores the fact that the process can be made less painful, especially for total-loss claims, when auto insurance companies adhere to "best practices" that are important to claim-filing policyholders.

According to the study, Auto-Owners Insurance ranks No. 1 in overall satisfaction among filers of auto insurance claims from more than two dozen auto insurers. The company sells policies through more than 6,000 independent agencies in 26 states. Auto-Owners Insurance, based in Michigan, attributes its high standing in the J.D. Power study to the contributions of those independent insurance agents.

top companies for handling auto insurance claims

Jeff Harrold, chairman and CEO of Auto-Owners Insurance, says in a news release: "To receive this recognition for the fourth year in a row is a positive reinforcement that we have brought peace of mind to those who needed us most. After all, that is what insurance is all about."

Behind Auto-Owners Insurance in the top five are, in descending order, State Farm, Amica Mutual, American Family and The Hartford. Trailing the top five but coming in above the industry average are Country, Erie Insurance and Travelers.

So, how do Auto-Owners Insurance and other auto insurers excel in claims processing?

Happy filing

A key factor in keeping auto insurance customers satisfied involves the handling of total-loss claims.

Consumers are less satisfied with the claims experience when dealing with a total loss than with a vehicle that's being repaired, according to the study’s findings. Every year, about 16 percent of auto damage claims result in a total loss. Only half of claim filers whose cars have been declared a total less think the settlement they received was enough to replace their totaled vehicle with a comparable one.

For consumers not familiar with the claims process, it can be easy to feel uneasy about what’s going to happen, according to Bill Sharpe, president of the National Association of Independent Insurance Adjusters.

Auto-Owners Insurance, which has topped the J.D. Power and Associates Auto Claims Satisfaction Study for four consecutive years, leads the industry in two key practices in total-loss settlements: ensuring that those filing a claim feel at ease with the process and providing flexible appointments for vehicle appraisals.

If your vehicle is declared total loss -- meaning that it can't be repaired or that its value is less than the cost of repairs -- and your auto insurance company offers you a settlement, you may question whether the amount is accurate. Here are four guidelines to help make sure you’re satisfied with the final settlement:

1. Compare prices. If you receive a settlement offer from your insurance company and are unfamiliar with selling prices for a vehicle comparable to yours (before it was totaled), do some research. Sharpe suggests hunting for similar versions of your vehicle on sites like AutoTrader.com and Craigslist. Call auto dealers in your area to find what comparable vehicles are selling for.

2. Talk to the company. If you think the settlement offer should be higher, print out the figures you’ve found for comparable vehicles in your area, then present the information to your insurance company.

3. Negotiate. Nearly 20 percent of claim filers negotiate the initial settlement figure they receive and successfully receive a higher settlement about 80 percent of the time, according to the J.D. Power study. The additional amount they receive is about $1,200.

4. Check the details. For example, verify the length of any rental-car coverage to avoid “surprise” out-of-pocket expenses that may pop up after the final settlement, says Jeremy Bowler, senior director of the insurance practice at J.D. Power.

Communication makes the difference

When it comes to handling total loss claims, Amica Mutual ranks No. 1 in the industry for returning phone calls to claim filers, setting expectations for the length of the claim process, updating the status of claims and limiting the information that a claim filer must provide repeatedly throughout the process.

American Family comes out on top with the shortest time period for informing claim filers of the settlement amount – a full three days less than the industry average. American Family, which ranked fourth overall in the study, says it makes a conscious effort to communicate effectively with its customers.

“It starts with the entire company placing explicit focus on the customer and following that up with programs and actions,” says Ken Muth, a spokesman for American Family. The company offers communication and customer service training for its employees and carries out customer surveys.

While these practices help smooth over the claims process, consumers also can play a role. Here are three tips to make sure you’re prepared if you have to file an auto insurance claim:

1. Read your policy. Insurance policies now are written in more consumer-friendly form, says J.D. Howard, founder of the Insurance Consumer Advocate Network. Read yours in its entirety and become familiar with it.

2. Monitor your coverage. Revisit your policy from time to time, perhaps once a year, to make sure it fits your needs, Muth says.

3. Get online. Many insurance companies have claims information readily available on their websites. Check what your company offers; if you have to file an actual claim at a later date, you’ll know what to expect.

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