2012 Superstorm Sandy property claims continue to roll in, and not with good response according to the “J.D. Power 2014 Property Claims Satisfaction Study — Wave 1” released today. The study, which is now conducted on a quarterly basis, is based on responses from 2,517 homeowners insurance customers who filed a property claim after April 1, 2012. The current wave of the study was fielded in the second quarter of 2013. This information follows the previous reporting period, the 2013 study that published in March, covering claims that were filed between July 2011 and December 2012.
Overall claimant satisfaction — based on settlement, first notice of loss, estimation process, service interaction and repair process — with the processing of Superstorm Sandy property claims has declined substantially by 20 points to 826 , compared with 846 (on a 1,000-point scale) in the previous period. However, despite the 20-point decline, overall satisfaction with all property claims during the current wave of the study remains stable at 832.
“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.”
These more complex Superstorm Sandy claims 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, according to the study. And, average settlement amount for property claims increased to $10,205 from $5,517 in the previous period.
Performance in several key performance indicators 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 5 percentage points to 69 percent.
“Providing an accurate estimate of how long it will take to settle a claim is very important in managing the claims experience,” Bowler said. “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.”
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