Communication Crucial According to Property Claims Study

Communication throughout the claims process is crucial to providing a satisfying claims experience, according to the J.D. Power and Associates 2011 Property Claims Satisfaction Study released today.

The study finds claimants are considerably more satisfied when key communication practices are performed by their insurance provider.

The study revealed greater satisfaction when claimants spoke with two representatives versus four or more in content losses.

Similarly, claimants with a content loss who received a thorough explanation of the claims process, along with a timeline for resolution are more satisfied than claimants who received no timeline.

Auto-Owners Insurance, The Hartford and USAA perform particularly well among insurers in providing claimants a satisfying property claims experience.

Among highly satisfied claimants, 77 percent say they “definitely will” recommend their insurer and 79 percent say they “definitely will” renew with their insurer. Conversely, among claimants with low satisfaction, just 8 percent say they will recommend their insurer and only 14 percent plan to renew.

The study also finds the following key trends:

• Approximately one-third of homeowner claims include contents loss claims, which tend to be more complicated, and sometimes emotionally charged; resulting in a less-satisfying experience than among those whose claim did not involve content loss.
• Nearly one-fourth of claimants negotiated the settlement amount with their insurer, most often regarding the amount of damage to be covered (50% of the time), additional living expenses (41%), materials used in the repair (28%) and/or personal items (16%).
• When settlement negotiations occur, claimants are more likely to consider switching insurers in the next 12 months.
• While 21 percent of auto claimants report paying out-of-pocket expenses in addition to their deductible, nearly 40 percent of home claimants with a content loss claim report paying out-of-pocket costs during the claims process. About one-fourth are reimbursed by their insurer. Satisfaction declines considerably when expenses paid by claimants are not reimbursed.
• Holdbacks or depreciation are two common causes for claimant-incurred expenses. When these expenses are later reimbursed, the claimant is negatively affected as a result of the loss mitigation practices.

The Property Claims Satisfaction Study measures insurance customer satisfaction with the property claims experience by examining five factors: settlement; first notice of loss; appraisal; service interaction; and repair process.

The 2011 study is based on surveys from nearly 3,000 insurance customers nationally who filed a property claim between November 2009 and April 2011, and evaluates 13 insurance companies, including: Allstate, American Family, Auto-Owners Insurance, Erie Insurance, Farmers, Liberty Mutual, MetLife, Nationwide, Safeco, State Farm, The Hartford, Travelers and USAA.

The study was fielded in April 2011.

Source: J.D. Power and Associates