Satisfaction with Homeowners Insurance Ebbing

The J.D. Power and Associates 2010 U.S. National Homeowners Insurance Study finds customers increasingly dissatisfied with their homeowners insurance.

Using a 1,000-point scale, the study measures customer satisfaction with homeowners insurance companies by examining five key factors: policy offerings; price; billing and payment; interaction; and claims. Overall satisfaction with homeowners insurance companies fell to 750 in 2010— a decline of 23 points from 2009. While satisfaction declined in every factor except claims, the greatest declines were in the policy offerings and interaction factors.

Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates, says the negative perceptions of homeowners insurance policy offerings may stem from an abundance of advertising from insurers promoting discounts on auto insurance and policyholders’ general lack of understanding of their homeowners insurance policies.”

“Homeowners insurance policyholders are already price sensitive due to the economy,” Bowler said. “Approximately 50% 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.”

Indeed, nearly one-third of policyholders indicate they recently contacted their insurer regarding their homeowners’ policy during the past 12 months.

For a ninth consecutive year, Lincoln, R.I.-based Amica Mutual ranked highest among homeowners insurance companies and performs particularly well in all five factors that contribute to overall customer satisfaction. Lansing, Mich.-based Auto-Owners Insurance, Erie, Pa.-based Erie Insurance and Cincinnati-based Cincinnati Insurance followed Amica in the rankings.