J.D. Power 2019 U.S. Home Insurance Study: Ready for Change

According to recent J.D. Power 2019 U.S. Home Insurance Study, roughly three-fourths (74%) of homeowner insurance customers feel that the homeowners insurance industry needs improvement. A whopping 13% of customers felt that “radical improvement is needed.” 

The study found that the overall customer satisfaction with homeowners insurance declined for the first time since 2015. J.D. Power believes that this dissatisfaction could provide an opportunity for insurtech providers to increase their market share through alternate approaches to coverage.

“Home insurance seems to be approaching an inflection point as customers expect more value for their premiums—and have demonstrated they are willing to switch insurance companies for it,” said Robert M. Lajdziak, Senior Consultant, J.D. Power Insurance Intelligence in a recent press release.

 “Customers are more likely to use digital channels when interacting with their home insurance companies and are now shopping to find the most convenient experience that meets their expectations—which are often set by other companies with which they do business. Customer expectations are being reset and create a serious need for improvement among traditional carriers in areas like products and coverage, underwriting and claims,” Lajdziak continued in the press release.

Key Findings of the 2019 Study

Here are just a few of the key findings of the J.D. Power study:

• Homeowners insurance business model is ready for change. The overall decline in satisfaction seems to be driven primarily by multi-year declines in satisfaction with the claims experiences by clients. A shocking 74 percent of homeowner insurance customers surveyed felt that the homeowners insurance industry needs to improve. 

• This dissatisfaction with the customer experience is creating opportunities for startups. The survey found that the biggest areas for improvement are: products offered and coverage; underwriting; and claims. Insurtech start-ups have noticed and are creating alternatives to the traditional insurance offerings.

• Bundling is a good idea according to the survey results, Homeowners who bundle auto and home insurance with the same insurance company have a higher satisfaction level. They are also more likely to get the full benefits of policy discounts as well as online access to policy information and proactive contacts at least once a year.

• Consumers are more likely to bundle when buying a policy through an agent as compared to those that purchase their policy online or via a call center. However, Progressive is an exception to this rule, having achieved a bundling rate of 83 percent from customers buying a policy from their website. 

• Amica Mutual finished in the number one spot for the 18^thyear in a row. Erie Insurance came in second and Auto Club of Southern California Insurance Group ranks third. 

• When it comes to renters insurance American Family took the top spot with State Farm ranking second and Auto Club of Southern California Insurance Group rounding out the top three.