Customer satisfaction with home insurance claims for Superstorm Sandy damage declined as claims became more complex, according to a new study from J.D. Power, a global marketing information services company.
The "J.D. Power 2014 Property Claims Satisfaction Study -- Wave 1" surveyed home insurance customers this year who filed property claims after April 1, 2012. A previous study surveyed customers who filed home insurance claims between July 2011 and December 2012.
Overall customer satisfaction with the handling of Sandy claims fell by 20 points to 826 on a 1,000-point scale compared to the previous study. Despite the decline, though, overall satisfaction with all property claims remains stable at 832.
The average settlement amount for Superstorm Sandy property claims increased to $10,205 from $5,517 in the previous period. More of the claims included in the most recent study were related to the exterior of the house, which boosted settlements.
"Since we wait until the conclusion of each claim to survey the customer, the complexity of the Superstorm Sandy claims in this wave has increased from the last reporting period," Jeremy Bowler, J.D. Power's senior director of the insurance practice, said in a press statement. "Property claims related to Superstorm Sandy were primarily for items damaged in the yard, and the settlement process was expedient. The current wave study findings include more complex Superstorm Sandy property claims being processed for the structure of the home."
Bowler noted that settling a claim for structural damage tends to take more time due to the scope of the damage. The longer claimants must wait for settlement, the less satisfied they are with their claims experience.
The number of days for initial payment for Superstorm Sandy claims in the current wave has increased to 25 days from 13.9 days in the previous period.
"Providing an accurate estimate of how long it will take to settle a claim is very important in managing the claims experience," Bowler said. "When estimates to settle are extended and claims become drawn out, the possibility that insurers will not return claimants' calls increases, as does the likelihood claimants will be required to repeat information, both of which contribute to a decline in claims experience satisfaction."