Home insurance needs improvement, consumers say

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Three-quarters of home insurance customers say the industry needs improvement, according to J.D. Power & Associates' 2019 U.S. Home Insurance Study.

The survey of more than 13,000 homeowners and renters insurance customers found that satisfaction with the category has declined for the first time since 2015. It's an opening for insurtechs either to move into the segment -- if they are writing their own coverage -- or sell incumbents on their merits, the company says.

"The areas of the home insurance relationship with the greatest perceived need for improvement are products and coverage; underwriting; and claims," J.D. Power says. "Insurtech start-ups have become increasingly active in creating alternatives to the traditional offerings in these areas."

Two factors that improve home insurance experience are bundling with other coverage, like auto; and the ability to service effectively online. The disconnect? Most bundling happens with customers that buy from an agent. However, J.D. Power cited ASI Progressive, "which has achieved a bundling rate of 83% among customers purchasing via their website." These customers buy online three times greater than the industry average.

"Customer expectations are being reset and create a serious need for improvement among traditional carriers in areas like products and coverage, underwriting and claims," says Robert M. Lajdziak, Senior Consultant, J.D. Power Insurance Intelligence. "Customers are more likely to use digital channels when interacting with their home insurance companies and are now shopping to find the most convenient experience that meets their expectations—which are often set by other companies with which they do business."

The top three ranked companies for homeowners satisfaction are Amica, Erie, and Auto Club of Southern California Insurance Group . On the renters side, top carriers are American Family, State Farm and Auto Club of Southern California Insurance Group.

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