The severity of property damage, settlement amount, and length of claim payment processing for Superstorm Sandy has increased in the current wave, compared with the previous period. The average settlement amount for property claims increased to $10,205 from $5,517 in the previous period. An increase in the number of claims related to damage to the exterior of the house (71 percent versus 65 percent) contributed to the higher settlement figures.

“Since we wait until the conclusion of each claim to survey the customer, the complexity of the Superstorm Sandy claims in this wave has increased from the last reporting period,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power. “Property claims related to Superstorm Sandy were primarily for items damaged in the yard, and the settlement process was expedient. The current wave study findings include more complex Superstorm Sandy property claims being processed for the structure of the home.”

Bowler noted that settling a claim for structural damage tends to take significantly more time due to the scope of the claim. The longer claimants must wait for settlement, the less satisfied they are with their claims experience.

These more complex Superstorm Sandy claims captured in this wave took much longer to settle than the Sandy claims captured in the previous period, and all of the timing metrics related to claims handling have increased. The most significant changes are an increase of nearly 10 days in the time it takes to inform claimants about the settlement terms (19.6 days after reporting claim), and an increase in the number of days until the initial payment is received by the claimant to 25 days from 14.1 days.

“Providing an accurate estimate of how long it will take to settle a claim is very important in managing the claims experience,” said Mr. Bowler. “When estimates to settle are extended and claims become drawn out, the possibility that insurers will not return claimants' calls increases, as does the likelihood claimants will be required to repeat information, both of which contribute to a decline in claims experience satisfaction.”

With the timing of key milestones in the claims process taking significantly longer for Superstorm Sandy claims, performance in several key performance indicators (“KPIs”) has also declined substantially. Returning all promised calls is down by 10 percentage points to 82 percent; avoiding having claimants repeat information is down by 12 percentage points to 61 percent; and providing an accurate claims length estimate is down by five percentage points to 69 percent.

Key findings include:

- The incidence of Superstorm Sandy claims being settled increased by 13 percent in the current wave of the study compared to the results published in the previous period.

- Claimant satisfaction with their Superstorm Sandy property claims experience in the current wave declined substantially by 20 points from the previous period.

- The number of days for initial payment for Superstorm Sandy claims in the current wave increased to 25 days from 13.9 days in the previous period.

Learn more: JDPower.com.