More than half of insurance customers will drop their coverage if the digital claims experience is “poor” or “just okay,” a new study has found.
The poll, from consumer research firm J.D. Power, found that 52 percent of auto and home insurance customers will leave their insurer over the issue.
The firm’s 2025 US Claims Digital Experience Study revealed the importance of digital offerings and communication not only to help claims flow more easily, but to improve customer retention.
“Across the insurance claims workflow, from first notice of loss to the estimate and ongoing status updates, customer satisfaction scores are highest when customers are able to manage the process via their insurers’ digital apps and websites,” J.D. Power Director of Global Insurance Intelligence Mark Garrett said in a statement.
The study gathered information from 5,958 auto or home insurance customers and analyzed an insurer’s mobile and web offerings (“channels”) across four categories: clarity of information, ease of using the channels, helpfulness of the channels, and range of services, according to J.D. Power.
Study reveals gap between customer expectations and insurer digital channels
In general, consumers prefer that their insurers give them “adequate” digital updates, the study noted. Yet home and auto insurers provided it just 22 percent of the time, leading to customers who feel disconnected from their policy provider and have to take extra steps to find information.
“Despite widespread industry efforts to promote digital-first notice of loss and claims management, 22% of customers still rely on multiple channels to find answers to the same question,” the study noted.
App-based status updates are another important area for customer satisfaction, too, but, as the study observed, only 36 percent of auto insurance customers and 31 percent of homeowners insurance customers get their updates through their app.
“Auto and home insurers have finally gotten the digital formula right with streamlined reporting tools, proactive updates, and well-designed apps,” Garrett said. “However, the industry still has some work to do when it comes to helping insureds navigate between digital and offline channels, which can sometimes create unnecessary friction in the claims process.”
Analyst says insurers have room for improvement
Overall, however, insurers are doing a relatively good job, J.D. Power Digital Solutions Analyst Kristen Coffin said in a statement.
“There are still a few key areas where customers end up hunting for information and need to repeat steps unnecessarily,” Coffin said. “There is a real opportunity for insurers to create a complete end-to-end digital experience that anticipates customer needs more proactively.”
The benefit for insurers? Customer retention. J.D. Power found that customers who rate their digital experience as “excellent” or “perfect” have just a 4 percent chance of leaving their insurer or failing to renew their policy.
