Customers Satisfied with Value of Homeowners Policies
Improvement in pricing drives overall satisfaction to highest level in five years.
Costs may be on the on the rise in many other sectors, but homeowners insurance customers are generally pleased with the value of their policies, according to a recent study from J.D. Power & Associates. Agents can increase customers’ satisfaction by making them aware of any discounts they are receiving and by cross-selling multiple policies with a single carrier.
The 2009 Homeowners Insurance Satisfaction Study shows that customer satisfaction with homeowners insurance is the highest in five years. The increase is largely due to improvements in price, policy offerings and the billing and payments process – in particular, satisfaction with price has increased by 46 points on a 1,000 point scale since 2008.
According to Jeremy Bowler, senior director of the insurance practice at J.D. Power, price satisfaction often hinges on whether customers received discounts on their policies. The majority of home insureds surveyed reported qualifying for one or more discounts, while 10% were unsure whether they qualified. Bowler says addressing this uncertainty can quickly result in a happy customer.
“Uncertainty in the mind of the customer is an opportunity,” says Bowler. “For customers who don’t know whether they get a discount, satisfaction is much lower than those who know.”
Discounts are often hidden in the policy’s fine print, but Debbie Roché, a personal lines CSR at The Kinney Agency in Albuquerque, N.M., makes sure to walk her customers through the policy completely so they are well aware of the bargains they’re getting.
“Price has become more of an issue in the past year,” Roché says. “Customers would like a breakdown of what discounts they’re getting as part of the policy review process.”
Bowler says cross-selling multiple policies is a major source of discounts for customers and is becoming an increasingly popular way to increase customer loyalty. The study shows that customer satisfaction increases with each policy purchased, and customers holding four or more policies with a single insurer report a satisfaction increase of more than 170 points on a 1,000-point scale.
“The value (of cross-selling) for the insurer and for the agent is quite profound,” says Bowler. “(It) has a huge effect in terms of retention.”
Mari Frost, personal lines manager at Jackson Park Agency Corp. in Allen, Mich., says cross-selling has always been a big part of doing business at her agency, but the discounts offered by purchasing multiple policies are not always easy to spot or market to insureds. She says that because of the rating on the policy, discounts are unlikely to come off the base premium, so she takes customers through all of their policies line by line to explain the savings. In addition to selling the value of the policy, Frost sells the value of her agency, appealing to frugal customers who want to know exactly what they’re getting for the money.
Company reputation and word-of-mouth feedback about claims handling also play into overall customer satisfaction; Roché says that if a particular carrier has come through for a friend or neighbor, her customers tend to be more pleased with their coverage even if they have never filed a claim themselves. According to J.D. Power’s study, agent-based homeowners carriers Erie Insurance, The Hartford and Liberty Mutual performed particularly well overall, earning 813, 789 and 762 points, respectively, on a 1000-point scale. The carriers were rated on the overall claims experience, contacting the insurer, policy offerings, billing and payment and pricing. Direct writer Amica Mutual received J.D. Power’s top award for customer satisfaction with a homeowners carrier for the eighth consecutive year.
Veronica DeVore (firstname.lastname@example.org) is Big “I” writer/editor.