Why so many people hate their car insurance company — and why you may not have to
When I tell someone that I am a financial journalist, they are often automatically intrigued. But, I usually see that intrigue fade from their face the moment I say, “Insurance is my main beat.”
There’s no getting around it — no amount of fun commercials and mascots have curried the public’s favor toward insurance companies or the industry as a whole. J.D. Power’s 2024 Auto Insurance Study found that more than half of customers have little trust in their auto insurer. A concerning statistic, considering your car insurance company is there to financially protect you — not dupe you out of your money each month. However, to many drivers, paying premiums may feel like lighting hard-earned cash on fire.
Your insurance bill due date probably isn’t your favorite day of the month, but your car insurance policy is more than just a legal box you need to tick to register your vehicle. Insurance may not spark joy for most, but understanding how your policy works to protect your finances can help make paying your bill a little more bearable.
Key takeaways
- From June 2022 to June 2024, the average cost of full coverage car insurance rose 20 percent — but rising prices aren't the only reason for the negative sentiment around car insurance.
- Long claim times, iffy customer service, complex policies and a lack of understanding about how car insurance works contribute to car insurance's poor public reputation.
- Doing your research and prioritizing your insurance needs can help make paying for car insurance more worthwhile.
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Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
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Powered by Coverage.com (NPN: 19966249)
Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
Why do people hate the idea of auto insurance?
Insurance has a bad reputation, and not in a cool, rebellious way. This partially has to do with the nature of the product. You probably only call your car insurance company when something bad happens, like when you get into an accident or if your car is stolen. Insurance is designed to be there for those unexpected losses to provide financial assistance you probably can’t afford on your own. But the road to receiving that financial assistance can be long and frustrating.
J.D. Power’s 2024 Auto Claims Satisfaction Study found that the average claims cycle time is now 23.1 days, a 6.2-day increase from the 2022 Study. To put that number into perspective, before the COVID-19 pandemic, the average claim cycle time was just 12 days.
“Insurance: give me money and I’ll cover you if you get into an accident.
*gets in accident
Insurance: does all they can do not pay you”
via Reddit community
It gets worse when you factor in rental cars; in some cases, your insurance company will cover rental vehicle use while your vehicle is in the shop for covered repairs — but only for a set period of time. The J.D. Power Auto Claims study found that more customers say their rental period isn’t long enough, and they are taking on out-of-pocket expenses while their vehicles are being repaired.
Still, insurance’s shoddy standing among the public stems from more than claims. While a drawn-out and sometimes disappointing claims process doesn’t help insurance’s cause, it’s not the only thorn in drivers’ sides.
Top reasons people dislike their auto insurance company (and the fix)
Customer service and claims experience
If you’re looking for car insurance reviews online from real customers, brace yourself. The online discourse about car insurance is overwhelmingly negative, particularly on forum websites like Reddit. Slow or disappointing claims processes don’t help, but they are only part of the problem. Aside from potential long hold times to speak with an agent or a limited ability to reach your insurer after hours, much of the customer service hangups have to do with the nature of insurance — you’re probably only picking up the phone to call your agent when something bad happens. In fact, you’re probably happiest with your insurance company when you don’t need to think about it. Folks online haven’t been shy when it comes to voicing their takes on experiences with different insurers and the industry as a whole.
April 26, 2024
Policyholder testimonial
“My most prized possession; my 1989 Jetta coupe was hit two months ago…I have a quote for $3500 to fix and pull my frame and fix the dent but the insurance company wants to call my car a total loss and pay me $700 for it. HOW DOES THIS WORK??? Im heart broken and frustrated and so p***ed off.”
via Reddit community
July 24, 2024
Perception of insurance
“I’ll put it this way, the more commercials [on] TV for that company, the worse they are. That’s all there is to it.”
via Reddit community
The fix: Reviews are helpful, but you need to take them with a grain of salt. Most people who are happy with their insurance company probably aren’t taking to the internet to talk about it. In fact, they’re probably just letting their policies work in the background.
If you change your mind about your insurance company, you’re allowed to shop around and switch companies. Maybe the claims experience left a bad taste in your mouth, or you’re just not happy with the quality of service. Either way, your car insurance policy isn’t written in stone. If you find a better quote elsewhere, or hear good things about a particular company and want to give it a try, you’re allowed to make that change. Just make sure you notify your previous car insurance company that you are canceling your coverage and ensure that the new policy date kicks in on time to avoid a coverage lapse.
Not ‘using’ your coverage and paying more for it
Insurance is a pretty unique financial product. Unlike a credit card that rewards you with points the more you swipe, your car insurance is something you likely hope to not have to use. For many, it’s seen as just another bill to pay every month that takes an uncomfortably big bite out of their budget. It doesn’t help that, between June 2022 and June 2024, the average cost of car insurance increased by 20 percent according to full coverage rate data from Quadrant Information Services. Increases can even hit drivers with clean driving records, as insurers have to increase rates to cover the general increasing cost of risk.
January 3, 2024
Cost of coverage
“Car insurance prices are ridiculous now! My premium has went from $120 a month to $215 a month in a year. No accidents, or tickets (knock on wood.) [My company] just decided to raise the prices because. I asked on the last renewal why the price went up so much. It had went up $70 on the last renewal. The only reason they could give me is prices are going up everywhere.”
via Reddit community
The fix: It’s a common misconception that you don’t actually “use” your insurance policy. In reality, you use it every time you get behind the wheel. Car insurance creates a financial safety net so that, should you be involved in a car accident, you might not have to front the entire cost of the accident alone. According to a 2022 report from the National Safety Council, the average property damage from a car accident is $6,100 per vehicle. Without a car insurance policy, you could be fronting that $6,100 bill out of pocket, which could be extra difficult in today’s economy. Bankrate’s 2024 Annual Emergency Savings Report found that 56 percent of U.S. adults wouldn’t pay an emergency expense of $1,000 or more from their savings.
Your policy limit should ideally balance your coverage needs, risk tolerance and budget — you usually won’t get a policy with all of the extras like comprehensive and collision coverage, roadside assistance and gap insurance at the cheapest cost. So, if you’re facing a higher premium, you may want to speak to a licensed agent about your coverage needs. It’s important not to drop your limits to the state minimums just to save on your premium; your car insurance policy should still offer you adequate financial protection. But, “adequate financial protection” is subjective. Understanding your financial needs and purchasing a policy that addresses them sufficiently can help make paying for your premium a less bitter pill.
Complex policies
On top of many people feeling like they aren’t “using” their car insurance policies, a study from Trusted Choice shows that car insurance is also something many may not even understand:
- 55 percent of Americans don’t know that standard car insurance does not cover business use of a vehicle.
- 44 percent believe that personal items stolen from your vehicle are covered by auto insurance.
- 57 percent are unaware that parking tickets do not affect auto insurance premiums.
Most people may not even be aware of their own knowledge gaps. Despite the incorrect beliefs about how insurance works, the same study found that 86 percent of respondents said they had a strong understanding of their insurance policies. To make matters worse, insurance rules and regulations vary state-by-state. Unless you know where to look, it can be hard to find reliable information about car insurance.
When I bought my first car, my insurance literacy was zero. I went with my dad to my parents’ insurance agent, signed the papers I was given, and added the types of coverage my parents recommended without really understanding what I was paying for. And I never ended up using my insurance — I just wrote checks to State Farm every six months until I sold my car. Looking back, I wish I’d taken the time to ask questions and even gone without my parents to talk to my agent so I could take more ownership of my own policy.— R.E. Hawley, Bankrate Senior Insurance Writer
The fix: A better understanding of your car insurance policy can not only make paying for your policy less painful, but it can also keep you from landing in false “I thought I was covered for that” territory. For instance, did you know that a minimum coverage car insurance policy won’t help with your vehicle repairs after an accident if you are found at fault? Liability-only car insurance doesn’t protect you from liability; rather, it helps with the damages you are liable for. So, if you caused an accident and dinged your own vehicle in the process, you’d need collision coverage to receive coverage for repairs.
My job here at Bankrate is to help everyday people gain reliable knowledge about how car and home insurance work, but you don’t need to be an expert to feel confident in your coverage. A little bit of legwork can go a long way when it comes to getting to know your insurance policy. And, if you need a little extra guidance, you can always speak to a licensed agent.
Outdated digital tools
Many insurance companies are behind-the-times with regard to their technology. Some operate on legacy systems and are hesitant to take the leap to updating their tech. That said, there’s been a growing interest in implementing AI in the insurance industry. A 2023 study from the National Association of Insurance Commissioners (NAIC) found that car insurance companies that currently use AI use it to help assign rates, underwrite policies, help with claims and to detect fraud. For now, it doesn’t seem like updating user-facing tech (like online portals and mobile apps) are a top priority, which could lead to frustration from policyholders who want convenient ways to manage their policies.
The fix: Knowing what you value in an insurance company can help set you up for success. If digital policy management is a priority for you, then searching for a company with highly-rated digital tools may be a good place to start. J.D. Power’s Insurance Digital Experience Study may be a good place to begin your search. Or, if you’d rather handle your policy face-to-face, look for a provider with local agent offices in your area.
One area where insurance is pushing the envelope tech-wise is with telematics. A telematics device or mobile app tracks driving behavior to reward good habits with an insurance discount. But, the rise in telematics has some drivers questioning how much data their insurance company is actually tracking, and how that data is used. Despite data showing that most drivers are in favor of usage-based insurance, a significantly smaller percentage of drivers have actually signed up for a program.
How can you prevent “buyer’s remorse” with your insurance?
You’ll probably never be excited to pay your premium, but there are some things you can do to prevent buyer’s remorse when choosing a car insurance company:
- Prioritize your needs: You won’t be happy with your car insurance company if it can’t give you what you need. Set price aside for a moment and think about things like how you want to pay your premium, how you want to manage your policy and if having a dedicated agent is important to you. If you choose a company that meets your expectations of how you prefer to handle different aspects of your policy, you’re more likely to be satisfied in the long run.
- Price isn’t everything: This ties into the previous point, but don’t choose a car insurance company just because it’s the cheapest option. Saving money is great, but doing so at the expense of your insurance needs (like a robust mobile app or local agents in your area) will probably only make your experience with your auto insurance company worse.
- Do your research: Not all car insurance policies and companies are the same. Once you’ve figured out what it is you need from your car insurance policy and company, you can do some digging to make a shortlist of potential best-suited companies. You can also find an insurance broker to help facilitate the process.
The bottom line
With the cost of car insurance trending up, it’s completely understandable (if not justifiable) that drivers may not have the warmest feelings toward their insurance company. But when it comes to financial products, insurance included, the old adage rings true: knowledge is power. Car insurance can be a tricky thing to understand, but by getting more familiar with your policy and your insurance needs, you’re more likely to make a buying decision that checks all your boxes. Remember that you aren’t locked down; if one company doesn’t work for you, do yourself a favor and make the switch.
