Claims News Service, Nov. 2, 9:01 a.m. EST -- Major hurricanes, such as the ones that have ravaged the Gulf Coast states in the past two years, have had a significant negative impact on homeowners' insurance customer satisfaction in those states, according to the J.D. Power and Associates 2005 Homeowners Insurance Study.
For the homeowners' insurance industry overall, customer satisfaction has remained stable compared to the 2004 study. However, satisfaction levels differ significantly from state to state. For example, in Florida, where four major hurricanes occurred in 2004, claim satisfaction is almost 10 percent lower than the rest of the nation.
Recent catastrophes coupled with serious underinsurance of properties create the potential for disappointed customers as claims are settled. Although study respondents indicate they've owned their primary residence for an average of 16 years, only about one-half of homeowners have had their home's replacement cost value updated in that time. Compounding the problem for consumers and carriers alike, home improvement projects often increase a home's value. According to the study, while 41 percent of homeowners reported they made significant structural changes to their home, 37 percent did not notify their insurer of these changes.
The study finds that 25 percent of homeowners do not know which type of homeowners' insurance policy they have, and another 24 percent mistakenly believe that they have a guaranteed replacement cost policy that would pay for whatever it costs to rebuild the home without any limits. Furthermore, 59 percent of homeowners' insurance customers don't feel responsible for the coverage limits, but rather believe the insurance provider or their agent bears the responsibility in determining the replacement cost needed to rebuild their property.
Homeowner Insurance Provider Rankings:
Among providers, Amica Mutual ranks highest in overall homeowners' insurance customer satisfaction for a fourth consecutive year. Amica is followed by State Farm, which records a 14 index point improvement from 2004. Erie Insurance Group, MetLife and The Hartford, respectively, round out the top five providers in the study. USAA achieved a higher satisfaction score than Amica, but is not included in the ranking because it is an insurance provider only open to the U.S. military community and their families.
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