J.D. Power and Associates Reports: Multiple Policies Lead to Greater Satisfaction and Loyalty among Homeowners Insurance Customers

WESTLAKE VILLAGE, Calif., Oct. 18 /PRNewswire/ -- Homeowners insurance policyholders who subscribe to at least one additional policy with their insurer tend to be more satisfied than those who only have a homeowners insurance policy, according to the J.D. Power and Associates 2007 Homeowners Insurance Study(SM) released today.

The study finds that a large majority of homeowners insurance policyholders -- 70 percent -- obtain additional products from their insurer, and that customer satisfaction increases as the number of bundled products rises. Customers with only one policy provide an average satisfaction score of 640 points on a 1,000-point scale, which is 175 points lower than customers who hold five or more insurance products with the same insurer.

Customers who bundle multiple policies also tend to renew them at a considerably higher rate compared with customers who have only one policy. In addition, premiums generated by customers who bundle auto and homeowners policies can average $2,000 or more annually. Insurers that promote bundling multiple policies may benefit from higher premiums, higher retention rates and higher customer satisfaction.

"Policyholders can enjoy many benefits through bundling multiple insurance products under a single provider, such as convenience in billing processes and multiple-policy discounts," said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. "In addition to higher satisfaction levels, customers who bundle products with their homeowners insurance carrier also tend to be more loyal and renew each policy at a higher rate than customers who purchase each policy from a separate provider. Offering bundled packages and effectively communicating their availability to policyholders can greatly impact the financial bottom line for providers."

For a sixth consecutive year, Amica Mutual ranks highest among homeowners insurance providers, performing particularly well in all five factors contributing to overall customer satisfaction: policy offerings; price; billing and payment; interaction; and claims.

Following Amica in the rankings are Erie, Cincinnati, State Farm, COUNTRY, Auto Club of Southern California and American Family, respectively. USAA, an insurance provider open only to the U.S. military community and their families and therefore not included in the rankings, also achieves a high level of customer satisfaction.

The study also finds that 29 percent of homeowners insurance policyholders report they don't know the type of replacement cost coverage they have, and these customers tend to be considerably less satisfied with their insurer. Additionally, only 59 percent of customers say they have informed their homeowners insurance provider about major home improvements that would affect coverage amounts.

"In the face of increasing home-building costs, it is particularly important for customers to be knowledgeable about the type of coverage they have, and to make sure it is sufficient to repair or replace their home in case weather-related disaster strikes," said Bowler. "Customers may think they are saving money by not informing their insurer about home improvements, but in the event that something happens to their home, a customer may be disappointed with the harsh reality of their policy not covering needed repairs."

    The study results also include the following key patterns:

    --  The most popular bundling option among multiple-policy holders is the
        combination of homeowners insurance with auto insurance.
    --  While one in five policyholders indicate they have shopped for a new
        homeowners insurer within the past 12 months, only 12 percent say they
        switched carriers between 2006 and 2007.
    --  Customers who report that their insurance company has re-evaluated the
        replacement cost of their home within the past 12 months are
        considerably more satisfied than customers whose home replacement cost
        has not been examined since they initially purchased their homeowners
        insurance policy.
    --  Nearly one-fourth of all homeowners insurance policyholders indicate
        they have contacted their insurer regarding a billing statement issue.
        Of these policyholders, the majority report they were dissatisfied
        with the experience. In addition, more than one-fourth of
        policyholders indicate they have never received an adequate
        explanation of their bill, despite needing one.

The 2007 Homeowners Insurance Study is based on responses from 10,903 homeowners insurance policy holders across the country. To view ratings on homeowners insurance providers, visit JDPower.com.

About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors including market research, forecasting, performance improvement, training and customer satisfaction. The firm's quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies

Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor's, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2006 were $6.3 billion. Additional information is available at http://www.mcgraw-hill.com.

     J.D. Power and Associates Media Relations Contacts:
     John Tews                Syvetril Perryman
     Troy, Mich.              Westlake Village, Calif.
     (248) 312-4119           (805) 418-8103
     john.tews@jdpa.com       syvetril.perryman@jdpa.com

No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates. http://www.jdpower.com/corporate

    Overall Satisfaction Ranking
    (Based on a 1,000-point scale)

    Amica Mutual                                821
    Erie                                        783
    Cincinnati                                  782
    State Farm                                  776
    COUNTRY                                     766
    Auto Club of Southern California            764
    American Family                             761
    Nationwide                                  757
    Auto Club Group                             756
    Liberty Mutual                              753
    Industry Average                            752
    The Hartford                                750
    MetLife                                     749
    American National Property and Casualty     749
    Safeco                                      748
    Chubb                                       746
    California State Automobile Association     744
    Encompass                                   741
    Allstate                                    738
    Farmers                                     732
    Travelers                                   718
    Fireman's Fund                              707

    USAA**                                      879

    **  USAA is an insurance provider open only to the U.S. military community
        and their families and therefore is not included in the rankings.