J.D. Power's 2014 Property Claims Satisfaction Study found that homeowners who have recently filed a property claim were more satisfied with their experience, relative to last year. The survey that collected data for the report yielded more than 5,500 responses from homeowners insurance customers who filed a property claim between April 2012 and January 2014.
Claimants were asked to rank their satisfaction with five specific aspects of the process: settlement, first notice of loss, estimation process, service interaction and repair process. Responses showed that claimants who recently filed a non-catastrophic claim "more often received a thorough explanation of their coverage when first reporting their loss, were more promptly notified of what damages were covered and received their settlement nearly four days faster," compared to 2013.
J.D. Power found that timeliness of communication is a significant factor in whether policyholders escalate their claims and how satisfied they are with the process overall.
Homeowners remain wary
A press release from the company noted that although policyholders are more satisfied with their insurance company's handling of their property claims, they remain concerned about whether they have adequate coverage in the wake of high-profile incidents such as Superstorm Sandy.
Jeremy Bowler, senior director of J.D. Power's insurance practice, explained that it can be difficult for insurers and inspection companies to coordinate and effectively handle a large volume of claims after an event of that scale, extending the length of the claim cycle and decreasing policyholder satisfaction.
To keep improving policyholder satisfaction with the claims process, insurance carriers will need to shore up their ability to promptly deliver accurate replacement cost estimates and, when necessary, coordinate with inspectors to assess damage to properties.
"Starting at the time of first notice of loss, it is crucial for insurers to keep claimants informed of their claim, the estimate of damages, the settlement amount, when work will begin and when it will be completed," Bowler said.
To meet this standard, insurers need to be able to quickly calculate the cost of claims, whether they are for the full cost of replacing a structure or only part of it. This requires an understanding of how different parts of the house contribute to the overall value. Insurers need to consider far more than size and other basic details. The cost of specific materials and localized labor costs also contribute to the cost of reconstruction.
Using e2Value's patented web-based estimator provides insurance carriers with accurate replacement costs at policy inception and centralizes property data so that all parties, including claims and inspection vendors, can access it remotely for better collaboration during the claims process. J.D. Power found that third-party services were engaged to inspect property damage in 15 percent of reported claims.
With hail, wind and other risks ramping up as we move into the spring season, insurers need to be prepared to act quickly in response to large-scale property damage from the weather. Time can be a critical factor, as a recent example shows. An unexpectedly intense hail storm in Louisiana recently left homeowners scrambling get their roofs repaired before seasonal rainfall could make the damage worse. In this case, any delay to the process could have increased the severity of the loss.