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J.D. Power and Associates Reports:
Customer Satisfaction with Homeowners Insurance Remains Flat,
While Satisfaction with Auto Insurance Continues an Upward Climb
Amica Mutual Ranks Highest in Customer Satisfaction with Homeowners Insurance
WESTLAKE VILLAGE, Calif.: 6 October 2008—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 StudySM released today.
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 finds 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 have been noted in the policy offering factor, the lack of improvement in customer satisfaction with homeowners insurance providers is 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 J.D. Power and Associates 2008 National Auto Insurance Study.SM 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 finds that satisfaction levels are particularly high among policyholders who bundle multiple policies with their homeowners insurance provider. Satisfaction averages 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,” said Leiman. “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 ranks highest for a seventh consecutive year among homeowners insurance providers, performing particularly well in all five factors that contribute to overall customer satisfaction. Following Amica in the rankings are Auto Club of Southern California, Cincinnati Insurance, Erie Insurance and Shelter, respectively. USAA, an insurance provider open only to the U.S. military community and their families and therefore not included in the rankings, also achieves a high level of customer satisfaction.
The study also finds the following homeowners insurance trends: - Nearly 50 percent of homeowners insurance policyholders report being offered an annual policy review. Satisfaction levels are considerably higher among policyholders who receive this offer than those who do not.
- In 2008, 42 percent of homeowners report experiencing an increase in premiums. While a premium increase can have a negative impact on customer satisfaction, the adverse effects can be dramatically minimized through effective notification to policyholders, followed by a discussion of policy alternatives.
The 2008 Homeowners Insurance Study is based on responses from more than 12,900 homeowners insurance policyholders. The study was fielded in May and June 2008.
For more information, view homeowners insurance ratings, or read an article at JDPower.com.
To view the management discussion based on the 2008 study findings or any of the other J.D. Power and Associates insurance publications, please click here.
About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services firm operating in key business sectors including market research, forecasting, performance improvement, training and customer satisfaction. The firm’s quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on boat ratings, car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.
About The McGraw-Hill Companies
Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor’s, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2007 were $6.8 billion. Additional information is available at http://www.mcgraw-hill.com/.
No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates. www.jdpower.com/corporate
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What does J.D. Power and Associates do?J.D. Power and Associates' research, consulting, and performance improvement services are used by a variety of industries to improve product quality and customer satisfaction. The firm's research is based solely on responses from millions of consumers and business customers worldwide. Product and service rankings that result from this research reflect the opinions of consumers and business customers-not the opinion of J.D. Power and Associates. Rankings are derived from nationally syndicated studies that serve as industry benchmarks for measuring and tracking quality and customer satisfaction. J.D. Power and Associates conducts the research, publicly announces the results, and then offers analysis based on consumer feedback to product and service providers to help them improve their businesses.
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