Car Insurance Claims Still Primarily Conducted on the Phone Despite Availability of Auto Insurance Apps

In today’s modern, technology-driven world, it seems that there is an app for everything.  And, while there have been auto insurance apps for a while now, studies show that people have been slow to adopt their use.  Use of auto insurance apps when an accident or damage occurs to your vehicle can help ensure you get the fastest response time and do not miss any details, yet people still prefer to speak to an insurance representative on the phone.  A recent study from J.D. Power shows that, in spite of auto insurance companies best efforts, insureds are reluctant to make the switch to submitting claims on apps, “Despite a nationwide advertising blitz for mobile auto insurance apps and widespread use of digital channels to purchase insurance, U.S. auto insurance customers have been slow to adopt digital claims reporting, according to the J.D. Power 2017 U.S. Auto Claims Satisfaction Study.SM The finding is significant in light of dramatically rising claims frequency and high losses, which are forcing insurers to control costs through increased reliance on technology… Nearly one-fourth (22%) of auto insurance customers begin their interaction with an insurer online, but just 9% of customers opt to report a claim digitally via the web or a mobile app. Even among Gen Y customers, who are most likely to report a claim digitally, only 12% are taking advantage of FNOL technology, a number that’s increased just 2 percentage points since 2016. Worse, overall satisfaction is 16 points lower (on a 1,000-point scale) among all customers who are using digital FNOL offerings than among those who report via phone.”

Making the switch can feel strange because many individuals often feel the need to explain circumstances or are upset and an app does not deliver the same level of interaction that speaking with an insurance representative does.  Further, it can feel strange for insureds to submit claims on an app because they may feel disconnected from the experience and worry that they will not receive as good of a response or as high of an appraisal if they do not speak to someone but J.D. Power’s auto insurance app study actually shows the opposite, “While adoption rates and satisfaction with digital FNOL offerings have been stubbornly low, digital status updates and digital appraisal offerings, which allow customers to upload damage photos via a mobile app, are being used by roughly 16% of auto insurance claimants. Overall satisfaction is 33 points higher among customers who receive digital status updates than among those who do not.”