Homeowners Dissatisfied with Insurance

October 6, 2010

This article is included in these additional categories:

Analytics, Automated & MarTech | Brand Metrics | Data-driven | Real Estate

Overall customer satisfaction with homeowners insurance companies has declined to the lowest level in five years, primarily due to considerable decreases in satisfaction with policy offerings and service interactions, according to the J.D. Power and Associates 2010 U.S. National Homeowners Insurance Study.

Overall Satisfaction Score Drops to 760
The study measures customer satisfaction with homeowners insurance companies by examining five key factors: policy offerings; price; billing and payment; interaction; and claims.

Overall satisfaction with homeowners insurance companies averages 760 on a 1,000-point scale in 2010, decreasing by 23 points from 2009. While satisfaction has declined in four of the five factors from 2009 (all except claims), the greatest declines are in the policy offerings and interaction factors.

J.D. Power research suggests negative perceptions of homeowners insurance policy offerings may stem from two issues in particular: an abundance of advertising from insurers promoting discounts on auto insurance and policyholders’ general lack of understanding of their homeowners insurance policies and how home premiums are determined.

Nearly one-third of policyholders indicate they recently contacted their homeowners insurer regarding their policy coverage or renewals during the past 12 months. However, satisfaction with these interactions has declined from 2009, due to deteriorating perceptions of the insurer’s timeliness in resolving customer issues.

Amica Mutual Rated Highest in Satisfaction
Amica Mutual ranks highest for a ninth consecutive year among homeowners insurance companies and performs particularly well in all five factors that contribute to overall customer satisfaction. Following Amica in the rankings are Auto-Owners Insurance, Erie Insurance and Cincinnati Insurance, respectively. USAA, an insurance provider open only to US military personnel and their families and therefore not included in the rankings, also achieves a high level of customer satisfaction.


Bundling Boosts Satisfaction, Especially with Gen Y
The study finds that, across all generational age groups, customers who bundle auto and homeowners insurance policies are notably more satisfied and likely to renew with their insurer, compared with customers who do not bundle their policies.

However, bundling has the most notable positive effect on retention among customers in the Gen Y demographic group (those born between 1977 and 1994), compared with other generational groups. Retention rates among Gen Y auto insurance customers who do not bundle average 72%, while retention among Gen Y customers who bundle their auto and homeowners policies averages 92%, a 28% gain. For customers in the Gen X (those born between 1965 and 1976) and Baby Boomer (those born between 1946 and 1964) generational groups, the gains average 11 percentage points and nine percentage points, respectively.

Positive Homeowners Claim Experience Maintains Loyalty
Among the 6% of homeowners insurance customers who experience a home claim each year, a positive claims experience may drive long-term loyalty, according to another recent study from J.D. Power & Associates. Findings from the 2010 Home Claims Satisfaction Study indicate that a positive claims experience may foster notable long-term loyalty, while a negative claims experience may drive claimants to shop for a new insurer.

About the Data: The 2010 US National Homeowners Insurance Study is based on responses from more than 12,900 homeowners insurance customers. The study was fielded between April and June 2010. J.D. Power and Associates is publisher of the study, which is the source of the enclosed chart.

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