Somewhat contrary to what my colleagues and I often hear from our clients, a recently released report indicates increased overall satisfaction among homeowners who filed a property damage claim, according to the J.D. Power 2014 Property Claims Satisfaction Study released this week.1
While it has been over 23 months since Superstorm Sandy hit the Northeast, its effects are still being felt in the insurance industry, where customers are expressing their relative dissatisfaction with the claims process. Satisfaction among those who filed a claim for damage caused by Superstorm Sandy averages just 830 in 2014, down from 846 among Sandy-related claimants surveyed shortly after the storm. Overall, however, satisfaction among homeowners insurance customers who filed a property claim between April 2012 and January 2014 averages 840 (on a 1,000-point scale)—up from 836 in the 2013 study.
Factors and Findings
The study indicates several factors that lead to policyholder satisfaction, and/or lack thereof. "Starting at the time of first notice of loss, the study notes, it is crucial for insurers to keep claimants informed of their claim, the estimate of damages, the settlement amount, when work will begin and when it will be completed," said Jeremy Bowler, senior director of the insurance practice at J.D. Power. "When major storms hit and insurers have to rely on third parties to assist in managing the large number of claims, service levels often deteriorate fast as each insurer has their own processes and approval requirements. This can sometimes lead to significantly extended claim cycle times."2 The 2014 study found that 15% of all claims reported involved a third-party damage inspection, down 5% from the 2013 study.
The study also noted the following key findings:
- When insurance companies effectively communicate with claimants, those claimants are less likely to escalate their claim to a supervisor. When a supervisor becomes involved, overall customer satisfaction drops by more than 160 index points.
- Timeliness of the communication also plays a role in whether or not a claim gets escalated. For example, if the settlement terms are provided to the claimant within one day of first notice of loss, only 6 percent of customers escalate the claim. The rate of escalation increases to 13 percent if the claimant is informed within one week and increases to 18 percent if it takes more than one week.
- Nearly one-fourth (23%) of claimants 21 to 40 years old escalate their claim to a supervisor, compared with 8% of claimants 41-65.
Wondering where your property damage insurance carrier ranks in the 2014 study? According to the J.D Power Property Claims Satisfaction Study, carriers rank as follows for 2014 policyholder satisfaction:
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