Tag Archives: Homeowners

Customer Satisfaction With Homeowners Insurance

The just released J.D. Power and Associates 2011 U.S. National Homeowners Insurance Study contains a number of interesting findings, but a couple of key takeaways really caught our attention.

For example, homeowners who carry sufficient insurance coverage to fully rebuild their homes in the event of a total loss are more satisfied with their insurer than those that don’t, the study found.

Approximately 16 percent of homeowners insurance policyholders indicate they carry less coverage than would be required to fully rebuild their home in the event of a total loss.

Among those policyholders, satisfaction averages 739 on a 1,000 point scale in 2011 – more than 40 points lower than among policyholders who say they have sufficient coverage.

J.D. Power notes that it is key for homeowners to ensure that their insurance coverage is sufficient before a disaster strikes.

While many homeowners may not give much thought to their insurance under normal circumstances, the moment they have to file a claim, the value of coverage becomes realized.

The study found  that customers who have filed a claim tend to be more knowledgeable about their policies – and also more satisfied – than those who haven’t had a claims experience.

Overall satisfaction with homeowners insurance companies averages 769 in 2011 – improving by 19 points from 2010, according to the study. While satisfaction improved in all five factors, the greatest gain was in the interaction factor.

This year’s study is based on responses from more than 9,100 homeowners insurance customers, fielded between April and July 2011.

Check out this I.I.I. video for tips on making sure you are  adequately insured.

Check out I.I.I. facts and stats on homeowners insurance.

Study: Homeowners Rates Still Inadequate

The majority of U.S. homeowners insurance rate filings approved by regulators still do not adequately recognize the cost of capital needed to protect policyholders in the case of a large catastrophic event, according to an annual review by Aon Benfield Analytics.

The study finds that at current rates the 2010 estimate of expected return on equity (ROE) for insurers writing U.S. homeowners business is 6.9 percent, compared to 6.1 percent in 2009.

However, for insurers to attain an ROE of 14 percent homeowners rates countrywide would need to increase by 19.9 percent. A number of states, such as those prone to hurricanes, would require far higher rate increases.

For example, Florida would require an average rate increase in the homeowners line of business of 79.4 percent for insurers to achieve an ROE of 14 percent, according to Aon Benfield’s analysis.

A press release cites Steve Mildenhall, CEO of Aon Benfield Analytics:

In many cases, we find that approved rates in the U.S. regulatory system do not recognize the need to hold capital to fund for the possibility of catastrophic loss. Rates that are solely based on average annual losses do not provide the necessary incentive for insurers to put such capital at risk.†

Aon Benfield’s Annual Homeowners ROE Outlook is based on more than 100 insurer rate filings from the 25 largest U.S. states.

Check out I.I.I. facts and states on homeowners insurance.