Overall satisfaction among homeowners who filed a property claim improves for the second consecutive year, according to the J.D. Power 2014 Property Claims Satisfaction Study.
While it has been more than 16 months since Superstorm Sandy hit the Northeast, its effects are still being felt in the insurance industry, where customers are expressing their relative dissatisfaction with the claims process. Satisfaction among those who filed a claim for damage caused by Superstorm Sandy averages just 830 in 2014, down from 846 among Sandy-related claimants surveyed shortly after the storm. Overall, however, satisfaction among homeowners insurance customers who filed a property claim between April 2012 and January 2014 averages 840 (on a 1,000-point scale)—up from 836 in the 2013 study.
Compared with 2013, research findings in 2014 show that homeowners insurance customers who filed a non-catastrophic claim in the past year more often received a thorough explanation of their coverage when first reporting their loss; were more promptly notified of what damages were covered; and received their settlement nearly four days faster.
“Starting at the time of first notice of loss, it is crucial for insurers to keep claimants informed of their claim, the estimate of damages, the settlement amount, when work will begin and when it will be completed,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power. “When major storms hit and insurers have to rely on third parties to assist in managing the large number of claims, service levels often deteriorate fast as each insurer has their own processes and approval requirements. This can sometimes lead to significantly extended claim cycle times.”
The study finds that 15 percent of all claims reported involved a third-party damage inspection, down 5 percentage points from the 2013 study.
· Overall satisfaction with non-catastrophic claims has increased by 11 index points in 2014, compared with 2013 (843 vs. 832, respectively).
· Overall satisfaction improves in four of the five factors year over year, while satisfaction with first notice of loss is the same as in 2013. The greatest increase in satisfaction is in the settlement factor (+4 points).
· When insurance companies effectively communicate with claimants, those claimants are less likely to escalate their claim to a supervisor. When a supervisor becomes involved, overall customer satisfaction drops by more than 160 index points.
· Timeliness of the communication also plays a role in whether or not a claim gets escalated. For example, if the settlement terms are provided to the claimant within one day of first notice of loss, only 6 percent of customers escalate the claim. The rate of escalation increases to 13 percent if the claimant is informed within one week and increases to 18 percent if it takes more than one week.
· Nearly one-fourth (23 percent) of Gen Y claimants escalate their claim to a supervisor, compared with 8 percent of Boomers. (Gen Y includes those born between 1977 and 1994, while Boomers are those born between 1946 and 1964.)
Amica Mutual ranks highest in overall satisfaction with the homeowners insurance claims experience for the third consecutive year, achieving a score of 898. Amica Mutual performs particularly well in all five factors. Erie Insurance ranks second with a score of 877, followed by Nationwide with 858. USAA also achieves high levels of customer satisfaction, although the insurer is not included in the rankings due to the closed nature of its membership.
The study, now in its seventh year, measures satisfaction with the property claims experience among insurance customers who filed a claim for damages covered under their homeowners’ policy by examining five factors: settlement; first notice of loss; estimation process; service interaction; and repair process.
The 2014 Property Claims Satisfaction Study is based on more than 5,500 responses from homeowners insurance customers who filed a property claim between April 2012 and January 2014.
Source: J.D. Power