To gauge homeowners' satisfaction with the claims experience, J.D. Power examines five factors: the settlement; first notice of loss (FNOL); estimation process; service interaction; and repair process. The current findings indicate an increase in the severity of property damage, settlement amount and length of claims payment processing for Sandy, when compared with the previous period. J.D. Power says the average settlement amount for property claims increased to $10,205 from $5,517 in the previous period. Moreover, a higher number of claims related to damage to the exterior of the house—71 compared to 65 percent previously) contributes to the higher settlement figures.

“Since we wait until the conclusion of each claim to survey the customer, the complexity of the Sandy claims in this wave has increased from the last reporting period,” explains Jeremy Bowler, senior director of the insurance practice at J.D. Power. “Property claims related to Superstorm Sandy were primarily for items damaged in the yard, and the settlement process was expedient. The current wave study findings include more complex Superstorm Sandy property claims being processed for the structure of the home.” Bowler notes that settling a claim for structural damage tends to take significantly more time because of the scope of the claim. The longer claimants must wait for settlement, the less satisfied they generally are with their experience. These more complex claims captured in this wave took much longer to settle than the Sandy claims captured in the previous period, and all of the timing metrics related to claims handling increased. The most dramatic changes are an increase of nearly 10 days in the time it takes 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 is received by the claimant to 25 days (from 14.1 days). “Providing an accurate estimate of how long it will take to settle a claim is very important in managing the claims experience,” says 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.” With the timing of key milestones in the claims process taking significantly longer for Sandy claims, performance in several key performance indicators (KPIs) has also declined substantially. For example, J.D. Power found that “returning all promised calls” slipped 10 percentage points to 82 percent; avoiding having claimants repeat information is down by 12 percentage points to 61 percent; and providing an accurate claims length estimate is down by 5 percentage points to 69 percent.