In a major catastrophe – such as Superstorm Sandy – it’s not surprising that some individuals affected by property loss end up unhappy with their insurance provider. But overall, most property insurance customers feel pleased with their claims experience.
That’s according to J.D. Power’s 2014 Property Claims Satisfaction Study – Wave 1, which found that while customer satisfaction with the handling of Superstorm Sandy property claims declined substantially, overall satisfaction with the property claims experience remained stable.
The study measured 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.
Overall claimant satisfaction with the handling of Superstorm Sandy property claims declined by 20 points to 826 (on a 1,000-point scale), compared with 846 in the previous period.
Despite the 20-point decline, overall satisfaction with all property claims during the current wave of the study remained stable at 832.
The severity of property damage, settlement amount and length of claim payment processing for Superstorm Sandy increased in the latest analysis, the study revealed. The average settlement amount for property claims increased to $10,205 from $5,517 in the previous period. An increase in the number of claims related to damage to the exterior of the house (71 percent vs. 65 percent) contributed to the higher settlement figures.
“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. Settling a claim for structural damage can take more time due to the scope of the claim, he said. The longer claimants wait for settlement, the less satisfied they are with their claims experience.
The most significant changes were an increase of nearly 10 days in the time it took 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 was received by the claimant to 25 days from 14.1 days. As a result, performance in several key performance indicators had also declined substantially.
Returning all promised calls was down by 10 percentage points to 82 percent; avoiding having claimants repeat information was down by 12 percentage points to 61 percent; and providing an accurate claims length estimate was 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,” said Bowler. “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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