NU Online News Service, Oct. 6, 3:06 p.m.EDT

Overall satisfaction with homeowners insurance increasedsignificantly for the first time in five years, driven by favorablecustomer perceptions of the value of their policies, according to aJ.D. Power and Associates survey.

The Westlake, Calif.-based information services companyyesterday released its 2009 National Homeowners Insurance Study,now in its ninth year.

J.D. Power said the survey measured five key factors withhomeowners insurance companies: policy offerings, price, billingand payment, interaction and claims.

The overall satisfaction average was 773 on a 1,000-point scalein 2009, an increase by 21 points from 2008.

J.D. Power said the overall increase was primarily attributableto substantial improvements in the price, policy offerings, andbilling and payment factors. In particular, satisfaction with priceimproved by 46 points from 2008.

Discounts consumers received on their policies appeared to playa role in improving perceptions. The percentage of policyholderswho reported receiving discounts increased 3 points in 2009 to 84percent. Of the 27 insurance companies included in the study, 10have experienced notable increases from 2008 in the proportion oftheir customers who report getting discounts.

J.D. Power said policyholders who receive discounts aresignificantly more satisfied than those who either do not receivediscounts or are unsure of the discounts they receive.

"To maximize the lift in satisfaction that discounts may bring,insurance companies must clearly inform customers of the number andtypes of discounts they are receiving," said Jeremy Bowler, seniordirector of the insurance practice at J.D. Power andAssociates.

Informing a customer of discounts, even if it brings no changeto the policy, can improve satisfaction by 90 points, heasserted.

Of the insurers surveyed, Amica Mutual, with a satisfactionaverage of 842, ranks highest for an eighth consecutive year amonghomeowners insurance companies. Also scoring well were Auto-Owners,Erie Insurance and State Farm, respectively, all above 800.

USAA, ranked high at 900, was not included in the rankingsbecause coverage is limited to U.S. military personnel and theirfamilies.

Among those with the worst rankings were Travelers, Fireman'sFund and American International Group with rankings below 740.

The study found that more than eight in 10 customers reportbundling multiple policies with their homeowners insurance company.Satisfaction with insurance companies' policy offerings increasedwith each additional policy purchased, with satisfaction averagingmore than 170 points higher among customers with four or morepolicies with their insurer, compared with customers who hold onlya homeowners policy with their insurance company.

"Keeping homeowners insurance customers well satisfied may paydividends, as these customers are very likely to purchaseadditional insurance policies and other financial products fromtheir insurer," said Mr. Bowler.

The study also found that improving satisfaction can alsoimprove retention. An increase in overall satisfaction from anaverage of 750 to 800 may result in a 10- to 15 percentage-pointincrease in those who say they "definitely will" renew theirpolicies. That increase can also improve the number of customerswho "definitely will" refer their insurer to others by thepercentage points.

The survey is based on responses from more than 12,900homeowners insurance customers who were contacted between April andJune of this year.