Harvey, Irma Could Threaten Record Homeowner/Rental Insurer Customer Service Scores: J.D. Power

September 21, 2017

Homeowners and renters are giving record-high customer satisfaction scores to their insurers, but Hurricanes Harvey and Irma could place those numbers in jeopardy as property losses mount, J.D. Power said.

Overall customer satisfaction scores reached an all-time high of 808 out of 1,000 among homeowners and 834 among renters, J.D. Power found in its 2017 U.S. Home Insurance Study released recently. Improvements in policy offerings drove the increase. The worry now, however, is that Harvey and Irma could stretch customer service abilities and undermine those gains.

“Although property insurers have made great strides in overall customer satisfaction over the past several years, the areas where they consistently see the lowest satisfaction scores are price and direct customer service,” Greg Hoeg, vice president of U.S. Insurance Operations at J.D. Power, said in prepared remarks. “These two areas in particular will be under enormous stress as insurers address losses from the recent hurricanes.”

In other words, Hurricanes Harvey and Irma could force insurers to take action in ways that will upset their customers and potentially hurt their images in the marketplace. But they may be able to take steps to mitigate those challenges, J.D. Power said.

“The risk to customer satisfaction in the wake of catastrophic events transcends those directly affected, and expands to other insureds whose satisfaction with service is also affected by the image of their carrier,” Robert Lajdziak, business consultant for the North American Insurance Practice at J.D. Power, said in prepared remarks. “Further, if carriers need to raise rates they need to execute on several best practices that mitigate the potential negative effect associated with premium increases. “Examples include ensuring customers understand their policy, explaining what the policy covers and discussing premium change options.”

Among J.D. Power’s other major findings:

The U.S. Home Insurance Study examines overall customer satisfaction with homeowners and renters insurance. J.D. Power measures customer satisfaction in both areas by examining five factors: interaction; policy offerings; price; billing process and policy information; and claims. Satisfaction is calculated on a 1,000-point scale. Responses from 15,909 online interviews conducted in June-July 2017 form the basis of the study.

Source: J.D. Power