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Life Health > Health Insurance

J.D. Power: Homeowner Satisfaction With Insurance Companies Erodes

By Marlene Y. Satter

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Homeowners have been growing steadily more dissatisfied with their insurance companies, and this year hit a new low, according to a study by J.D. Power & Associates. The J.D. Power and Associates 2010 U.S. National Homeowners Insurance Study, released Tuesday, reflected survey respondents’ rankings of their insurance companies on a number of issues, and many were found wanting.

According to the company, rankings by consumers on the five main areas of policy offerings, price, billing and payment, interaction, and claims brought overall satisfaction ratings with homeowner’s insurance companies of 750 on a 1,000-point scale in 2010; that’s a 23-point drop from 2009. While satisfaction has dropped in four of those five factors from 2009 (all but claims, which one might argue is the most important of the list), the greatest declines, say the survey, are in the policy offerings and interaction factors.

Too much advertising from insurers pushing auto insurance discounts, and the lack of understanding among policyholders of how home premiums are calculated—coupled with a basic lack of understanding of their homeowner’s policies—are considered the main reasons for the drop in satisfaction among customers.

Customers who bundle auto and homeowner’s insurance policies, despite the dissatisfaction with auto coverage advertising, are the most satisfied across all age groups and the most likely to renew. This is most notable among Gen Y customers.

Regarding the dissatisfaction level, Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates, said in statement, "Homeowner’s insurance policyholders are already price sensitive due to the economy. 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."

The survey further reported, “Nearly one-third of policyholders indicate they recently contacted their homeowners insurer regarding their policy coverage or renewals during the past 12 months. However, satisfaction with these interactions has declined from 2009, due to deteriorating perceptions of the insurer's timeliness in resolving customer issues.”

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