Study finds policyholders ‘strained’ by higher deductibles, more total losses
Even though auto insurance rates have begun to decline, customers are still feeling the sting of several years of sky-high insurance costs, as evidenced by their “strained” claims experiences due to higher deductibles, according to J.D. Power.
The results of the 2025 U.S. Auto Claims Satisfaction Study show that 26% of auto insurance customers now have deductibles of $1,000 or more, and 7% of auto insurance customers say they’ve avoided filing a claim for fear their rates could rise.
As a result, overall satisfaction with the auto insurance claims process is largely flat at 700 (on a 1,000-point scale), rising just 3 points year-over-year, according to the study.
The overall average cycle time for repairable vehicles in this year’s study is 19.3 days, down from 22.3 days compared to a year ago, contributing to a 9-point improvement in satisfaction, J.D. Power said.
“However, that total cycle time is heavily influenced by the number of advanced driver assistance systems (ADAS) affected,” a press release states. “Average cycle time for vehicles from model year 2015 and older with no ADAS features is 17.9 days, while average cycle time for newer vehicles (model year 2019 and newer) with three or more ADAS features is 21.5 days.”
Total losses now account for 27% of claims, up from 24% a year ago and up from 16% in 2022, according to the study.
Satisfaction scores declined 9 points among customers who experienced a total loss, with 58% saying the total loss valuation fully met their expectations. Smaller claims of $2,000 or less now represent 20% of total claims, down from 21% in 2024 and 33% in 2022.
After auto insurance rates peaked near record highs in April 2024, they steadily declined during the remainder of the year and into 2025.
Many insurers have filed for rate decreases in 2025, while many customers have yet to feel the effects of those decreases — 44% of auto insurance customers with a claim say they experienced a price increase in the past 12 months, according to the study.
“Auto insurance customers have made several adjustments to their policies in an effort to reduce costs — such as opting for higher deductibles, dropping rental coverage, avoiding filing claims and, in some cases, foregoing collision coverage altogether,” said Mark Garrett, J.D. Power’s director of global insurance intelligence, in the release. “These changes have generally had a negative effect on consumers, as they are spending more money when they have a claim. However, fewer claims being reported translates to faster cycle times and better customer support, resulting in a 9-point improvement in satisfaction among repairable vehicles.”
Overall satisfaction among customers who experienced a rate increase is 650, which is 104 points lower than those who did not experience a rate increase.
Overall satisfaction scores among customers with deductibles of $1,000 or more who incurred rental costs are 630, down 21 points from 2024.
J.D. Power’s study ranks Erie Insurance as the highest in overall customer satisfaction with a score of 743, followed by NJM Insurance Co. (731) and Liberty Mutual (730).
“To reduce costs, many auto insurance customers have adjusted their policies by taking higher deductibles or foregoing rental coverage, but these cost-saving measures have a negative effect on customer satisfaction,” the release states. “The trend is most prominent among younger customers, with 43% of Gen Z auto insurance customers who had a price increase now carrying a deductible of $1,000 or more.”
A recent report from the Consumer Federation of America (CFA) found executives of the top 10 largest insurance companies received $134 million in combined compensation last year, while their customers faced sizable premium hikes and increasingly widespread non-renewal notices.
Auto insurance costs were 7% higher in May 2025 compared to May 2024, while industry profits increased to $169 million in 2024, according to an Oct. 22 release about the report.
At least two new companies, ZeroedOut and Deductify, offer auto insurance deductible coverage, promising savings for consumers who have or switch to traditional higher-deductible plans. Both promise to provide financial relief for policyholders needing to file claims for vehicle repairs.
Auto insurance carrier switching is at an “all-time high,” according to J.D. Power’s Q3 Insurance Shopping Loyalty Indicator and Shopping Trends (LIST) report.
Switching rose to 4.5% during the quarter, up 0.3 percentage points quarter-over-quarter (QoQ) and year-over-year (YoY). Among those who switched, the average amount of premium moving carriers is more than $4,500
Shopping increased only slightly, by 0.2 percentage points QoQ and no change YoY.
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