Customer Satisfaction With Home Insurance Is Falling, and Not Only Because of High Prices
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If you've filed a home insurance claim recently, there's a decent chance you're not pleased with your policy. As home insurance costs rise, it’s taking longer for repairs and claims to be completed, and both factors are leading to a decline in customer satisfaction.
A new J.D. Power study found that home repair cycle times are “through the roof.” This refers to the number of days from when a claim is filed to the completion of home repairs, and the average cycle time is up to 23.9 days — an increase of six days since 2022. The fact that home insurance prices have increased significantly only adds to policyholders' aggravation.
It’s unsurprising, then, that customer satisfaction with homeowners insurance is declining for the study group, which is made up of about 6,000 policyholders who’ve recently filed a claim. In the past year, average customer satisfaction is down five points from 874 to 869 on J.D. Power's 1,000-point scale.
Insurers are dealing with a higher number of claims and greater severity of damages, which is likely why repairs are taking longer, according to Mark Garrett, director of claims intelligence at J.D. Power.
“Catastrophic weather events are straining an already fragile system still experiencing supply chain issues that affect the availability and cost of materials,” Garrett said in a release. “Resources become strained for both insurers and the contractors doing the work.”
Why satisfaction with home insurance is down
All aspects of the claims process are taking longer: damage estimates, customer payouts and the actual repairs. Customers tend to get frustrated when claims take longer than three weeks, according to J.D. Power. Naturally, more severe claims will take much longer than that amount of time, but homeowners only have so much patience for more minor repairs.
Higher home insurance premiums are also affecting satisfaction.
A separate report from Guaranteed Rate Insurance, a national brokerage, found that the national average annual cost of home insurance climbed to $1,723 in 2023, up from $1,276 in 2021.
J.D. Power notes that 28 disasters last year caused at least $1 billion of damage, which was a record and a financial blow for the industry. Insurance companies say they’re increasing premiums due to the increase in claims as well as higher home repair costs.
Customers looking to save money on homeowners insurance sometimes opt for higher deductible policies. Unfortunately, higher deductibles typically lead to lower satisfaction among people who file claims.
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