Although homeowners insurance satisfaction is up from 2010, relatively few homeowners have flood or earthquake insurance, and those who do are less satisfied with their flood insurance.
August was a difficult month for those living on the East Coast between the 5.8 earthquake that hit Virginia on Aug. 23, and Hurricane Irene making landfall in North Carolina and marching up the coast to flood Vermont. According to J.D. Power and Associates, few people who live in catastrophe-prone areas even have earthquake or flood insurance, and those with flood insurance are “significantly less satisfied with their policies overall.”
The 2011 U.S. National Homeowners Insurance Study revealed that prior to Hurricane Irene, fewer than one in 10 homeowners insurance customers in New England and the Mid-Atlantic states carried flood insurance. In the Gulf states more than 25% carry flood coverage, which J.D. Power thought was relatively low considering those states experience more severe weather.
Out of a 1,000-point scale, satisfaction with flood coverage only averaged 735 points. Earthquake coverage fared a little better with satisfaction averaging 766 points.
“So far, 2011 has been a tough year for the property insurance industry due to the occurrence of multiple natural catastrophes — ranging from tornadoes in the southern U.S. in the spring, to massive flooding in the Midwest, to the recent earthquake on the East Coast, followed by Hurricane Irene — which have driven home the necessity among many U.S. consumers of having adequate homeowners insurance coverage,” Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates, said in a statement.
Despite any dissatisfaction, the study reports that overall satisfaction in 2011 is still up from 2010 by 19 points. There are five factors to satisfaction, including policy offerings, price, billing and payment, interaction and claim
s. Although satisfaction is up in 2011, it’s still below satisfaction with auto insurance companies, which is higher by 21 points.
The one area where homeowners insurance has an advantage over auto insurance is bundling. Customers who bundle policies with their homeowners insurance reported being more satisfied than those who didn’t. But in auto insurance, those who didn’t bundle were more satisfied than those who did.
“Certain auto insurers have deemphasized the benefits of policy bundling in favor of selling auto-only policies,” said Bowler. “These auto insurers, while able to gain an advantage on pricing, are serving only a portion of the market.”