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Auto insurance: Winners of 2011 InsuranceQuotes.com Insurance Quality Awards

It’s clear that auto insurance companies are battling to outdo each other in advertising, but how do they stack up where it really matters: price, service and fairness in settling claims?

We scoured the rankings, sifted through consumer survey data and talked with experts to bring you the InsuranceQuotes.com Insurance Quality Awards, honoring the best auto insurance companies for 2011.

Best Auto Insurance Company

Winner: Amica Mutual

best auto insurance companies amica

In consumer rankings, Amica Mutual almost always comes out on top. For example, in the 2011 National Auto Insurance Study, market research giant J.D. Power and Associates put Amica at the top of auto insurance heap for the 12th year in a row based on a consumer survey measuring overall satisfaction, service, policy offerings and ease of payment.

“It’s kind of the overall customer experience – if you were to stop somebody on the street, how would they judge the quality of service they get,” says Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates.

Amica uses a toll-free number instead of agents, but gets high marks for trying to match the customer with the correct product and educating the customer about what to expect from the company's coverage, according to Bowler. Robert Hunter, director of insurance at the nonprofit Consumer Federation of America, says: “Amica would be on everybody’s list of good companies.”

When the J.D. Power survey results were released, Robert DiMuccio, chairman, president and CEO of Amica Mutual, noted several initiatives launched in 2011 that were aimed at boosting customer service:

• New apps for iPhone, BlackBerry and Android devices.

• A system that lets customers pay their premiums electronically.

• Improvements to the online claims center and automatic payment plan.

"We’re determined to provide our customers the best possible customer service – whether on the phone, online or on the go. It’s all part of our commitment to being the absolute best that we can be,” DiMuccio said.

Best Auto Insurance Company

Runners-up: Auto-Owners Insurance, State Auto Insurance

Auto-Owners Insurance, whose policies are sold in 26 states, and State Auto Insurance, available in 33 states, both get high marks from Consumer Reports – 92 out of 100 and 90 out of 100, respectively – based on a survey of more than 96,000 readers. Readers rated insurers on claims-related problems, other types of problems and timely payment of claims.

Best Shopping Experience

Winner: American Family Insurance

best auto insurance companies amfam

The American Family Insurance business model – insurance is sold by local agents who deal only with American Family policies, rather than independent agents who sell for several companies – helped it win the top spot in J.D. Powers' 2011 Insurance Shopping Study, according to Bowler.

The study surveyed customers who recently bought auto insurance about their overall purchase experience and their interaction with a call center representative or local agent, as well as the insurer’s website, policy offerings and price.

“American Family’s sales agents are the differentiator – they focus on building a relationship with the customer,” Bowler says.

American Family concentrates on selling bundled policies for the entire household and keeping up with its customers to help them adjust their coverage to match lifestyle changes. “They have made an effort to compete on service rather than price,” Bowler says.

When the J.D. Power survey results came out, American Family’s president, Jack Salzwedel, said in a news release: "The credit here goes to our agents and employees. There are a lot of companies who say they want to focus on customers and put the words down on paper. But there are very few that actually have it as part of their fabric and culture and really believe it."

Best Shopping Experience

Runner-up: Auto-Owners Insurance

Auto-Owners Insurance ranked No. 2 in the J.D. Powers and Associates shopping study for similar reasons, according to Bowler. “It’s the strength of the agency relationship (with the customer),” Bowler says.

Best or Most Discounts

Winner: Progressive

best auto insurance companies progressive

Most auto insurers offer discounts for bundling policies, installing anti-theft devices in cars or good grades for teen drivers. Consumer Reports lauds Progressive for its innovative “Snapshot" discount, which lets a driver save up to 30 percent by installing a device in the car that monitors miles driven, acceleration and braking.

The Snapshot program is not available in every state; in three states, customers can be penalized with higher rates if the device reveals risky driving.

Best or Most Discounts

Runner-up: State Farm

State Farm has a similar program available only in eight states, but only for vehicles equipped with an active OnStar security and communication device. The program can deliver average premium savings of about 5 percent, according to State Farm.

Best Low-Cost Insurance

Winner: Erie Insurance

Erie Insurance, which sells policies through independent agents in 11 states, got five out of five “power circles” in the J.D. Power rating system. That means it was ranked among the best companies for pricing in J.D. Power’s 2011 National Auto Insurance Study, which surveyed customers about their auto insurance, and the J.D. Power 2011 Insurance Shopping Study, which surveyed customers who had recently bought insurance. Erie Insurance also earned high scores for overall satisfaction.

“You can get a good price without giving up good service,” Hunter says. “Some of the top companies (for customer service) are also among the lowest-priced.”

Erie Insurance spokesman Chris Banocy says the company strives to provide its customers "with as near-perfect protection and as near-perfect service as is humanly possible while doing so at the lowest possible cost."

Best Low-Cost Insurance

Runner-up: USAA

USAA also got five out of five "power circles" for pricing in two J.D. Power studies – and stellar marks for service from J.D. Power and Consumer Reports. But USAA offers insurance only to active U.S. military members, veterans and some of their family members. Most years, USAA pays a dividend to its customers. “After the dividend, it ends up being a very inexpensive company (for premiums),” Hunter says.

Best TV Ads

Winner: GEICO

best auto insurance companies geico

It was GEICO’s chatty Gecko that launched the auto insurer advertising wars, and GEICO still makes the best TV ads.

A survey by the Market Force Information market research company found that the highest percentage of customers -- 39 percent -- picked GEICO as the auto insurer that does the best job of communicating its value through advertising. It makes sense: GEICO outspends its competitors, shelling out $900 million for advertising in 2010.

“A decade ago, one in three (consumers) didn’t even know who GEICO was,” Bowler says. “GEICO is working very hard to be front and center – they’ve got universal brand recognition today.”

The Consumer Federation of America's Hunter says consumers shouldn't let funny commercials influence their purchase decisions: “That is not the way to shop for car insurance.”

Best TV Ads

Runners-up: Allstate and Progressive

In the Market Force Information survey, Allstate (with its havoc-wreaking Mayhem character) and Progressive (with quirky customer service rep Flo) followed GEICO, with 22 percent and 17 percent of customers, respectively, saying they did the best job communicating through ads. About one-fourth of the people questioned said they'd consider switching because of an ad.

“In order to grow (in the auto insurance industry), you have to steal somebody else’s customer,” Bowler says. “GEICO and Progressive are growing because others are shrinking.”

Best Claims Service

Winner: Auto-Owners Insurance

best auto insurance companies auto owners

Auto-Owners Insurance won the top spot in J.D. Power and Associates 2011 Auto Claims Satisfaction Study, which surveyed consumers who recently had filed claims. Policyholders were asked about:

• Overall satisfaction.

• Service interaction. This included the customer representative’s concern and responsiveness.

• Appraisal of the value of the vehicle and dollar amount of damage.

• Repair process. This included quality and speed of service.

• Fairness of the claim settlement.

“Auto-Owners excels in simplicity of communication,” Bowler says. “No other carrier does a better job of limiting the number of people you have to talk to.”

Half of Auto-Owners customers said they dealt with only one company representative.

Auto-Owners also did a good job calming customers after a crash – the company scored 900 out of 1,000 for quality of interpersonal interaction.

“It’s not that they’re fastest to settle a claim, but they did a better job of explaining how long it would take – if it’s going to take two weeks, then the customer is fully prepared for it,” Bowler says.

Furthermore, Auto-Owners received high marks for perceived fairness of claim settlements. Only 7 percent of the company's customers tried to negotiate a settlement, compared with an average of 11 percent. Bowler says that for the "worst offenders," the figure is 20 percent.

Best Claims Service

Runner-up: State Farm

State Farm also scored well on interpersonal interaction in the J.D. Powers claims survey. Bowler says State Farm's biggest advantage is its size.

“They are by far bigger than anybody else, so they have more customers, more claims and more established relationships with repair partners,” Bowler says.

“Say you have a big snowstorm and hundreds of cars are damaged in a single day. If State Farm calls the repair shop and says, ‘I’ve got 30 customers and I want you to get right on it,’ the repair shop is likely to heed that because they know they will bring in 30 cars next week, too.”

No matter whether you're dealing with a titan like State Farm or a smaller player like Auto-Owners, experts say what makes a good auto insurance company is pretty simple. “A good company treats you right, doesn’t try to fool you, and is prompt and fair," Hunter says.

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