NU Online News Service, Oct. 5, 11:26 a.m. EDT

Amica Mutual continued its run atop J.D. Power and Associates' homeowners insurance customer satisfaction survey as the industry overall sunk to its lowest satisfaction level in five years.

J.D. Power said customers reported decreases in satisfaction with policy offerings and service interactions in its "2010 U.S. National Homeowners Insurance Study," driving a 23-point decline on J.D. Power's 1,000-point satisfaction scale relative to last year. Insurers averaged 750 points in 2010, compared to 773 in 2009.

The study, which is based on responses from more than 12,900 homeowners insurance customers polled between April and June 2010, measures customer satisfaction in policy offerings, pricing, billing and payment, contacting the insurer, and claims.

Customer satisfaction declined in all categories except for claims, J.D. Power noted, with the greatest declines in policy offerings and interaction.

J.D. Power said, "Negative perceptions of homeowners insurance policy offerings may stem from two issues in particular: an abundance of advertising from insurers promoting discounts on auto insurance and policyholders' general lack of understanding of their homeowners insurance policies and how home premiums are determined."

Jeremy Bowler, senior director of the insurance practice at J.D. Power, said, "Homeowners insurance policyholders are already price-sensitive due to the economy. Approximately 50 percent of customers don't have a clear understanding of how much coverage or what type of coverage they have on their home and may have erroneously expected their premiums to decrease just as home values have declined since 2008. As a result, many customers believe their policies are not aligned with their property values and express dissatisfaction."

J.D. Power said customers who bundle auto and homeowners insurance policies are "notably more satisfied and likely to renew with their insurer" compared to customers who do not bundle their policies. This factor had the most impact among Generation Y customers, where retention was 72 percent for those who did not bundle policies and 92 percent for those who did--a 20 percent gap. The retention gap was 11 percent for Generation X and 9 percent for Baby Boomers.

"Currently, nearly 40 percent of Gen Y consumers own a home," said Mr. Bowler. "Insurers that can successfully convince Gen Y home insurance policyholders to bundle their home and auto policies may be positioning themselves for the financial benefits of retaining this growing generation."

For the rankings, Amica Mutual ranks highest among customers for a ninth consecutive year, J.D. Power said, performing "particularly well in all five factors that contribute to overall customer satisfaction." Behind Amica are Auto-Owners Insurance, Erie Insurance and Cincinnati Insurance, respectively. USAA, an insurance provider open only to U.S. military personnel and their families and not included in the rankings, also scored high among customers, J.D. Power said.

Special Reports /

Customer Satisfaction Deteriorates For Homeowners Insurers

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