Only 58% of auto insurance customers fully understand what their policy covers, a four-point drop from the previous year, according to the JD Power 2026 U.S. Auto Insurance Study. At the same time, roughly one-third of shoppers now use artificial intelligence when comparing coverage-and those who do are 1.3 times more likely to switch insurers.
The study reveals a widening divide between the information insurers provide and the clarity customers demand, pushing more shoppers toward AI tools to fill the knowledge gap. Stephen Crewdson, managing director of insurance business intelligence at JD Power, said the market has moved from a pricing problem to an experience problem.
"Rates are stabilizing, but many customers still say their interactions aren't seamless - especially when they must switch channels to resolve a single inquiry - even as a seamless cross-channel experience has become the single-most impactful driver of satisfaction in the study," Crewdson said. "At the same time, JD Power is seeing customers increasingly turn to AI tools to help compare coverage and make decisions, which underscores the growing gap between how insurers communicate and how customers now expect to engage. In a soft market, that friction will separate insurers that earn long-term loyalty from those that struggle to keep pace with rising expectations."
Policy understanding gaps push shoppers to AI
Only 58% of customers said they fully grasp their policy details, down from 62% a year ago. Customers who do understand their coverage have satisfaction scores that are 127 points higher, and they are more likely to renew and recommend their carrier. Meanwhile, 32% of shoppers turned to AI for Insurance tools during their search-for general questions, quotes, comparisons, and final decisions-the study found. Some 33% found the AI content unhelpful, yet AI-using shoppers were significantly more prone to switch insurers, suggesting they lean on AI when insurers fail to explain coverage clearly.
Cross-channel friction erodes satisfaction
Nearly half (46%) of customers used more than one interaction channel in the past 12 months, but satisfaction dipped sharply when they had to jump between channels to resolve a single inquiry. The inability to provide a smooth cross-channel experience has become the most influential driver of customer satisfaction, surpassing even price, the study found. Crewdson noted that this friction will increasingly determine which insurers build long-term loyalty as competition intensifies.
Price satisfaction improves slightly
Overall satisfaction with auto insurers held steady year over year. Price satisfaction rose three points, driven by fewer customers reporting insurer-initiated premium increases and more saying they received multiple discounts, useful policy information, and avoided payment fees. Still, price satisfaction plummeted 155 points when customers faced a premium increase initiated by their insurer.
Why this matters for insurance professionals
The study points to two urgent priorities for carriers: closing the coverage comprehension gap and fixing disjointed customer interactions. When customers can't get answers without switching channels, or when policy language remains opaque, they will look elsewhere-and AI tools are making that comparison shopping faster and easier. For insurers, investing in clearer communication and unified cross-channel support is no longer optional; it directly affects retention, referral rates, and how customers perceive the value they pay for.
Your membership also unlocks:
