October 23rd, 2010 by Lori Reed
Home insurance agents may be interested to know about a recent study which found customer satisfaction levels have been falling in their sector in recent years.
According to J.D. Power and Associates, overall customer satisfaction with home insurance companies has now fallen to a five-year low, with factors like service interactions and dissatisfaction with policy offerings driving the trend.
Specifically, satisfaction with home insurance companies received a score of 750 on a 1,000-point scale, marking a decline of 23 points from the previous year. Satisfaction has actually declined in four out of the last five years, with 2009 being the exception.
“Homeowners insurance policyholders are already price sensitive due to the economy,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. “Approximately 50 percent 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.”
While people may be frustrated by not fully understanding the details of the home insurance policy, this isn’t the only factor that has influenced the industry’s image. The J.D. Power report suggested that customer sentiments are also potentially affected by the far higher-profile efforts among auto insurance companies that focus on discounts.
Customer satisfaction has also apparently declined this year because of timeliness in resolving customer issues, although this is just one of several factors at play.
Another point that agents may want to take note of is the report’s finding that customers who bundle auto and home insurance policies with the same company are more likely to be satisfied. Customers who carry all of their policies with the same company are also likely to benefit from discounts – and a growing number of Generation Y members owning homes has created new opportunities for sales.
“Insurers that can successfully convince Gen Y home insurance policyholders to bundle their home and auto policies may be positioning themselves for the financial benefits of retaining this growing generation,” added Bowler.
When it comes to ensuring a smooth claims process, agents may also encourage their customers to keep an inventory of their valuables as well as receipts for major purchases such as wide-screen TV sets.