For the first time in five years, overall consumer satisfaction with homeowners insurance has increased significantly, driven by favorable customer perceptions of the value of their policies, according to the J.D. Power and Associates 2009 National Homeowners Insurance Study released today.
Customer perception of price, policy offerings and billing and payment factors improved substantially over 2008. In particular, satisfaction with price increased by 46 points from 2008.
The percentage of policyholders who reported receiving discounts has increased in 2009 to 84 percent from 81 percent in 2008. Of the 27 insurance companies included in the study, 10 have experienced notable increases from 2008 in the proportion of their customers who report getting discounts.
The study also found that more than eight in 10 customers reported bundling other polices, such as auto, with their homeowners insurance company. Satisfaction with insurance companies’ policy offerings increased with each additional policy purchased, with satisfaction averaging more than 170 points higher among customers with four or more policies with their insurer, compared with customers who hold only a homeowners policy with their insurance company.
By improving overall satisfaction, insurers will also see an impact on renewal and recommendation rates. For example, improving overall satisfaction from an average of 750 to 800 may result in a 10- to 15-percentage-point increase in the proportion of customers who say they “definitely will” renew their policies. Similarly, this improvement in satisfaction may also result in a 10- to 15-percentage-point improvement in the number of customers who say they “definitely will” recommend their insurer to others, according to the J. D. Powers study.
Amica Mutual ranked highest for an eighth consecutive year among homeowners insurance companies, performing particularly well in all five factors that contribute to overall customer satisfaction. Following Amica in the rankings are Auto-Owners, Erie Insurance and State Farm, respectively. USAA, an insurance provider open only to U.S. military personnel and their families and therefore not included in the rankings, also achieved a high level of customer satisfaction. Lowest among the firms surveyed were Travelers, Fireman’s Fund and AIG.
The average homeowner pays $1,409 a year in homeowners’ insurance premiums, according to 2006 data from the National Association of Insurance Commissioners.