While 25 percent of consumers rent their primary residence, 46 percent of renters are uninsured, according to the “2013 U.S. Household Insurance and Bundling Study,” from J.D. Power. And agents who focus on homeowners customers are missing a large opportunity to build long-term relationships with renters, J.D. Power said, whose insurance needs only grow through life or circumstance changes, such as having a family, purchasing a home or additional car.
Satisfaction with insurers is higher among renters (809) than among homeowners (787), which is a good sign for insurers considering that renters, generally a younger customer base, place more importance on website (22 percent) and online assistance (11 percent) channels than homeowners do.
The study found that State Farm captures the largest share of the renter insurance market (26 percent), followed by Allstate (12 percent) and USAA (10 percent). Customer retention rates also were found to be higher among renters who bundle an auto policy (91 percent) compared to renters who do not bundle an auto policy (67 percent).
“Many insurance agents focus their time selling high-dollar products, such as auto and homeowners, with higher commissions instead of the average $200 per year renters policy,” said Jeremy Bowler, senior director of the global insurance practice at J.D. Power. “This is shortsighted because agents who satisfy the large renter population today are more likely to retain and service their growing household insurance needs over time.”
The report also ranked renters and homeowners insurers. Among renters, Nationwide (823) ranks highest, followed by American Family (817), Automobile Club of Southern California (814) and State Farm (811). Those were the only four insurers scoring above the industry average in this sector for customer satisfaction, which was 809.
Among homeowners insurers, Amica Mutual (842) ranks highest by nearly 30 points, followed by State Farm (813), Auto-Owners Insurance (812), Erie Insurance (811) and the Automobile Club of Southern California (808). The average customer satisfaction rating among homeowners insurers was 787, with American Family (797), Progressive (796), Allstate (789), GEICO (789) and The Hartford (787), among others, scoring above that.
The 2013 U.S. Household Insurance and Bundling Study is based on 21,167 responses from customers who may have the following insurance product lines: homeowners; renters; individual life insurance; recreational vehicle; personal liability umbrella; and secondary residence. The study was fielded from June 10, 2013, through July 12, 2013.
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