Report: Homeowners with Flood Insurance Less Satisfied Than Those Who Opt Out

Among homeowners insurance policyholders, those with flood insurance tend to be significantly less satisfied with their policy coverage, compared with policyholders who opt not to carry it, according to the J.D. Power and Associates 2011 U.S. National Homeowners Insurance Study(SM) released today.

The study measures customer satisfaction with homeowners insurance companies by examining five key factors: policy offerings; price; billing and payment; interaction; and claims.

Fewer than one in 10 homeowners insurance customers in New England and the Mid-Atlantic states report carrying flood insurance prior to Hurricane Irene. A higher proportion of policyholders in the Gulf states—more than 25 percent—carry flood coverage either through their homeowners insurance company, state flood plans or another provider.

Among homeowners who carry flood insurance, overall satisfaction with their homeowners insurance company averages 735 on a 1,000-point scale in 2011. In comparison, satisfaction among homeowners with earthquake insurance coverage averages 766.

The study finds 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.

The study finds that 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 these policyholders, satisfaction averages 739—more than 40 points lower than among policyholders who say they have sufficient coverage.

Overall satisfaction with homeowners insurance companies averages 769 in 2011—improving by 19 points from 2010. Despite these gains, customer satisfaction with homeowners insurance companies remains significantly below satisfaction with auto insurance companies, which averages 790 in 2011, according to the J.D. Power and Associates National Auto Insurance Study(SM), published in June.

One key difference has emerged between homeowners insurance customers and auto insurance customers in 2011. Among homeowners insurance customers, those who bundle more than one policy with their insurer are notably more satisfied with price than customers who do not bundle policies. Among auto insurance customers, the opposite is true—those who hold only their auto policy with their insurer are notably more satisfied with price than those who bundle policies.

Amica Mutual ranks highest for a 10th consecutive year among homeowners insurance companies. Following Amica Mutual in the rankings are Auto-Owners Insurance and Erie Insurance (in a tie), Cincinnati Insurance, State Farm, and American Family, respectively. USAA, an insurance provider open only to U.S. military personnel and their families and therefore not included in the rankings, also achieves a high level of customer satisfaction.

The 2011 U.S. National Homeowners Insurance Study is based on responses from more than 9,100 homeowners insurance customers. The study was fielded between April and July 2011.

*USAA is an insurance provider open only to U.S. military personnel and their families and therefore is not included in the rankings.

Included in the study but not award-eligible due to market share criteria and/or localized availability are: North Carolina Farm Bureau and Tennessee Farm Bureau.

Included in the study but not ranked due to not meeting minimum sample requirements are Alfa Insurance, American National Property & Casualty, Fireman’s Fund and Shelter.

Power Circle Ratings Legend:
5 – Among the best
4 – Better than most
3 – About average
2 – The rest

Source: J.D. Power and Associates