The gap in customer satisfaction between homeowners and auto insurance providers has steadily widened since 2004, with homeowners insurance customer satisfaction remaining essentially flat during the past five years, according to the J.D. Power and Associates 2008 Homeowners Insurance Study.
Now in its eighth year, the study measures customer satisfaction with homeowners insurance policies by examining five key factors: policy offerings; price; billing and payment; interaction; and claims.
The study found that customer satisfaction with homeowners insurance during the past five years shifted only one index point from an average score of 753 on a 1,000-point scale in 2004 to 752 in 2008. Although some improvements were noted in the policy offering factor, the lack of improvement in customer satisfaction with homeowners insurance providers was primarily driven by declines in scores in the claims and pricing factors.
In contrast, satisfaction with auto insurers has steadily increased during the same time period-up 25 points from 2004 to a score of 787 in 2008, according to the study. In particular, satisfaction with pricing has driven steady improvement in satisfaction with auto insurance providers.
“Catastrophic storms that have occurred during the past five years have motivated many homeowners insurance providers to limit their exposure in the geographic areas that are most at risk,” said Jeff Leiman, senior director of the insurance practice at J.D. Power and Associates. “As a result of heavy losses, coverage in the affected areas is more difficult to obtain and policies are more expensive nationwide.”
The study found that satisfaction levels are particularly high among policyholders who bundle multiple policies with their homeowners insurance provider. Satisfaction averaged 782 when policyholders bundle home insurance and auto insurance policies, compared with an average of 689 among policyholders who do not bundle policies.
“Bundling multiple policies delivers benefits to both policyholders and providers,” Leiman said. “The practice allows providers to capture additional business, and policyholders to qualify for additional discounts. More than 90 percent of those who bundle policies renew those policies with their provider, while only 82 percent of non-bundlers do the same.”
Amica Mutual ranked highest for a seventh consecutive year among homeowners insurance providers, performing well in all five factors that contribute to overall customer satisfaction. Following Amica in the rankings were Auto Club of Southern California, Cincinnati Insurance, Erie Insurance and Shelter.
USAA, an insurance provider open only to the U.S. military community and their families and therefore not included in the rankings, also achieved a high level of customer satisfaction.
For more information, view homeowners insurance ratings, visit http://www.jdpower.com/.
Source: JD Power