J.D. Power: Severe Events Challenged Use of Digital Tools for Homeowner Claims

Homeowner satisfaction with property claims edged higher last year, but longer cycle times caused by severe events and rising costs challenged insurers and tested the limits of digital tools, J.D. Power said Thursday.

The industry average for overall customer satisfaction was 874 on a 1,000-point scale, based on a survey of 5,343 homeowner insurance customers who filed a claim within the previous nine months.

The score was better than the average of 871 in 2021, but results were mixed. J.D. Power said eight insurers had lower scores than in the previous year while eight improved. Erie Insurance ranked on top for customer satisfaction with a score of 912, followed by Amica (903) and Nationwide (884).

(USAA would have ranked second with a score of 906, but J.D. Power doesn’t list it in the same ranking as other carriers because the carrier serves military families exclusively.)

Homesite landed the lowest customer satisfaction score of 815, below Automobile Club of Southern California (842) and ASI Progressive (851).

Homeowner satisfaction with property claims climbed steadily in surveys from an average score of 846 in 2015 to a peak of 883 in 2020. J.D. Power said despite insurer investments in digital solutions to streamline the claims process, long cycle times are testing the limits of that technology.

“J.D. Power has seen a sharp rise in the number of customers contacting their insurer for information, particularly tied to these longer-tailed claims,” Mark Garrett, director of insurance intelligence, said in a press release. “Satisfaction among customers who need to primarily call their insurer for updates includes some of the lowest scores compared with other update methods.”

Garrett said 2022 as the first year that J.D. Power saw declining use of digital claims reporting, using digital channels for status updates and submitting photos electronically. That is apparently tied to the severity of damage. Customers are less likely to use digital channels for severe claims, the company said.

Homeowners are waiting longer for repairs. The survey found that the average time elapsed from reporting the claim to finished repairs was 22 days, four days longer than the previous year and a week longer than 2020. The increase were driven by the severity of the damage and delays in getting materials for repairs, JD Power said.

On the other hand, J.D. Power said forcing customers who prefer to use the telephone also strains customer satisfaction. The survey showed that 20% of customers who indicated a preference for interacting with their insurer via phone or in-person received only a digital copy of their repair estimate or primarily received status updates through digital channels. Satisfaction scores were 60 to 70 points lower for those customers.

JD Power said the number of times customers needed to contact their insurers for information about their claim was a key difference between brands with high customer satisfaction scores and those with low scores.