The results of J.D. Power and Associates' yearly Home Claims Satisfaction Study are in, and the 2009 findings seem to echo the sentiment of last year. Policyholders who file auto claims are still generally happier with their experience than are those filing property claims.

The study analyzed insurer performance throughout the entire claim process, including First Notice of Loss (FNOL), appraisal; service interaction, settlement, and the repair process. Factored in this year's results were responses collected between July and August 2009 from 2,500 insurance customers nationally who filed a property claim between January 2008 and July 2009. In total, the study evaluated 11 insurers, including: Allstate; American Family; Amica Mutual; Farmers; Liberty Mutual; Nationwide; Safeco; State Farm; The Hartford; Travelers; and USAA.

According to the report, settlement accounts for 41 percent of claim satisfaction, and dissatisfaction with this segment may greatly impact the entire experience. On average, customer satisfaction with the home claims experience registers 828 on a 1,000-point scale. By comparison, satisfaction with the auto claim experience averages 842, according to the study. J.D. Power and Associates attributes the gap to the fact that homeowners' claims tend to be farm more complex than auto.

“[In addition], homeowners' insurance claimants tend to have less knowledge of the specifics of their policy coverage than do auto claimants,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. “Although satisfying home claimants is particularly challenging, it's still crucial for insurance providers to meet the needs of these customers, given the significant impact the experience has on long-term policy retention.”

Indeed, there is a strong correlation between favorable homeowners' claim experiences and customer loyalty and advocacy. Among customers of insurers that achieve high satisfaction scores (averaging 837 or higher), two-thirds say they “definitely will” renew their policy, while 64 percent say they “definitely will” recommend the insurer. In contrast, among customers of insurers with lower levels of satisfaction (scores averaging 816 or below), only 49 percent say they “definitely will” renew and 42 percent say they “definitely will” recommend the insurer, said J.D. Power and Associates.

“While only about six percent of homeowners insurance customers per year file a home claim, for those who do, no other aspect of the experience with their insurer is more meaningful,” said Bowler. “An experience that meets or exceeds customer expectations may foster long-term loyalty, just as a negative experience may drive a customer to shop other insurance companies.”

In particular, insurers can enhance customer satisfaction during the FNOL and settlement portions of the claim process. During the settlement process, claimants' lack of understanding regarding their policy coverage often leads to negotiated settlements. Twenty-two percent of home claimants report negotiating the settlement amount, while just 11 percent of auto claimants say the same.

“The negotiation process tends to be difficult and stressful and often leads most customers to become dissatisfied with their claims experience,” said Bowler. “On average, satisfaction among home claimants who negotiate their settlement is 117 points lower than among those who didn't negotiate. By thoroughly explaining the limitations of the policy coverage and fully managing customer expectations, insurance companies may be able to lower the number of negotiations and improve claimant satisfaction considerably.”

Special Reports /

Homeowner Claim Satisfaction Still Lagging

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