Overall satisfaction with homeowners insurance companies averages 769 in 2011—improving by 19 points from 2010, according to the J.D. Power and Associates 2011 U.S. National Homeowners Insurance Study.
The study examines five factors: policy offerings; price; billing and payment; interaction; and claims. While satisfaction has improved in all five factors from 2010, the greatest gain occurs in the interaction factor.
Despite these gains, customer satisfaction with homeowners insurance companies remains below satisfaction with auto insurance companies, which averages 790 in 2011, according to the J.D. Power and Associates National Auto Insurance Study, published in June.
While customer satisfaction with homeowners insurance companies rebounded from 2010, it still remains below levels achieved in 2009. Similarly, among auto insurance policyholders, satisfaction has improved notably from 2010.
While satisfaction also increased in all five factors among auto insurance customers, one key difference has emerged between homeowners insurance customers and auto insurance customers in 2011. Among homeowners insurance customers, those who bundle more than one policy with their insurer are notably more satisfied with price than customers who do not bundle policies. Among auto insurance customers, the opposite is true—those who hold only their auto policy with their insurer are notably more satisfied with price than those who bundle policies.
Among homeowners insurance policyholders, those with flood insurance tend to be significantly less satisfied with their policy coverage, compared with policyholders who opt not to carry it, according to the 2001 survey.
Fewer than one in 10 homeowners insurance customers in New England and the Mid-Atlantic states report carrying flood insurance prior to Hurricane Irene. A higher proportion of policyholders in the Gulf states—more than 25 percent—carry flood coverage either through their homeowners insurance company, state flood plans or another provider.
Among homeowners who carry flood insurance, overall satisfaction with their homeowners insurance company averages 735 on a 1,000-point scale in 2011. In comparison, satisfaction among homeowners with earthquake insurance coverage averages 766.
“So far, 2011 has been a tough year for the property insurance industry due to the occurrence of multiple natural catastrophes—ranging from tornadoes in the southern U.S. in the spring, to massive flooding in the Midwest, to the recent earthquake on the East Coast, followed by Hurricane Irene—which have driven home the necessity among many U.S. consumers of having adequate homeowners insurance coverage,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates.
According to Bowler, while many homeowners may not give much thought to their insurance under normal circumstances, the moment they have to file a claim, the value of coverage becomes realized. The study finds that customers who have filed a claim tend to be more knowledgeable about their policies—and also more satisfied—than those who haven’t had a claims experience.
“Unfortunately, the majority of homeowners affected by Hurricane Irene were not covered for flood damage, and many may find their claims denied,” said Bowler.
The study finds that approximately 16 percent of homeowners insurance policyholders indicate they carry less coverage than would be required to fully rebuild their home in the event of a total loss. Among these policyholders, satisfaction averages 739—more than 40 points lower than among policyholders who say they have sufficient coverage.
Amica Mutual ranks highest for a 10th consecutive year among homeowners insurance companies and performs particularly well in all five factors that contribute to overall customer satisfaction. Following Amica Mutual in the rankings are Auto-Owners Insurance and Erie Insurance (in a tie), Cincinnati Insurance, State Farm, and American Family, respectively. USAA, an insurance provider open only to U.S. military personnel and their families and therefore not included in the rankings, also achieves a high level of customer satisfaction.