Collision repair shops work with insurance customers every day, and a new study suggests that work is becoming more complicated. Fewer drivers say they understand what their auto policy actually covers, and more are turning to artificial intelligence to fill in the gaps, a shift that can surface directly at the repair counter when customers are working through a claim.
According to the JD Power 2026 U.S. Auto Insurance Study, only 58% of customers said they completely understand their auto policy and what it covers, a decline of 4 percentage points from the 2025 study, according to the JD Power press release. The study also found that roughly one-third of auto insurance shoppers now use AI tools when comparing coverage, and those shoppers are significantly more likely to switch insurers than customers who do not use AI.
AI use linked to higher switching rates
Nearly one-third, or 32%, of auto insurance shoppers used AI tools during their search, even though a similar share, 33%, found the AI-generated content unhelpful, according to a JD Power AI and Insurance Special Report cited in the release. These shoppers most often turned to AI for general questions, quotes, policy comparisons, and decision-making, the release states.
Customers who used AI tools were more than 1.3 times as likely to switch insurers compared with customers who did not use AI, according to JD Power. The company said this points to a pattern in which customers turn to AI to fill gaps when insurers do not clearly explain coverage, shifting some control over policy information away from carriers.
How shops are responding to coverage confusion
Some collision repair shops have already adjusted how they communicate with customers about coverage and claims. At Helfman Collision Center in Houston, repair authorization documents have been rewritten to spell out clearly what the shop and the vehicle owner are each responsible for.
"A simple two- or three-sentence repair authorization no longer cuts it," Greg Luther, collision director at Helfman and chairman of the Auto Body Association of Texas (ABAT), previously told Autobody News. Clearer documentation helps customers understand potential costs, potential claim challenges, and payment responsibilities before issues arise later in the repair process.
Confusion about how insurance works has also shaped how some shops handle customers weighing whether to file a claim at all. Mike Schoonover of Schoonover Bodyworks and Autocare in Minnesota said he has heard customers express reluctance to involve their insurer, according to a separate Autobody News report.
"We've had a lot of customers comment, 'I really don't want my insurance company to find out,'" Schoonover said.
Schoonover said his shop encourages customers to call their insurance agent directly to understand potential rate implications before deciding whether to file a claim. “They're absolutely shocked and horrified when the insurance company tells them your rates might jump 20, 30, 40%,” he said.
Zack Newman of Newman’s Auto Body and Repair in Olathe, Kansas, told Autobody News that his shop has taken a similar approach.
“Starting a couple years ago, we have become hyper focused on explaining to customers how the insurance companies handle their claim,” Newman said, adding that doing this has helped redirect customer frustration from the shop to the insurance company. “They seem to understand well and many end up changing carriers, while also looking at their policy coverage options closer. A large percentage of our customers pay additional, out of pocket, to get genuine parts.”
Lauren Cullen, a customer service representative at Choice Collision Centers in Providence, R.I., said her shop takes a similarly structured approach.
“We walk every customer through their insurance claim process, deductibles, and rental car coverage, as these details directly impact the vehicle's repair,” Cullen said.
Among the areas the shop clarifies for customers, deductibles function like a medical co-payment, with the insurance company covering repair costs above that amount and the customer's specific deductible due to the shop at the time of vehicle pick-up, Cullen said.
She also said carrying "full coverage" does not automatically include a rental car, since rental coverage is a separate policy add-on, and that the shop will contact a customer's insurance adjuster to check on rental car eligibility if the customer is unsure of their coverage.
Micah Elsom, vice president of collision operations at Yoder Collision Network, said the drop in customer coverage comprehension is felt directly on the front lines. “So we've shifted to a much more proactive educational approach.”
While the shop does not handle the insurance policy itself, Elsom said it has changed how it breaks down the repair plan for customers, spending extra time explaining how specific coverages, such as deductibles, OEM part endorsements, or comprehensive versus collision coverage, apply to a customer's specific repair and how their choices might affect their out-of-pocket responsibilities.
“Taking that time upfront to translate collision and insurance jargon into plain language has worked incredibly well to eliminate surprises and keep the customer fully informed,” he said.
How this connects to other recent insurance and claims trends
The JD Power findings on AI adoption follow a separate development in how insurers use artificial intelligence in the claims process. State insurance regulators launched a 12-state pilot program in March 2026 to examine how insurers use AI to make claims decisions, including tools that influence total loss thresholds, damage assessments and parts valuations.
That program, developed by the National Association of Insurance Commissioners, found that 88% of auto insurers currently use or plan to use AI to evaluate claims, according to an NAIC survey cited in that report.
The JD Power study's findings also align with broader market data on claims and total losses. Repairable claims were down 10.4% through August 2025 compared with the same period a year earlier, and total loss frequency reached 22.8% through October 2025, putting the industry on pace for a second consecutive record year, according to CCC Intelligent Solutions data reported by Autobody News.
For collision repair shops, limited understanding of deductibles, rental coverage, and total loss valuation can surface at the repair counter when customers are working through a claim, and inconsistent insurer service across channels can extend the time shops spend coordinating with carriers on a customer's behalf.
