2011 JD Power National Home Insurance Study: The Best & The Rest

My last blog post discussed the winners & losers from the JD Power national 2011 auto insurance study, which is great timing, because JD Power released its 2011 national homeowners insurance study a few days ago. So with this blog post, I can review JD Power’s latest homeowners insurance rankings.

Why are JD Power’s annual insurance studies important?

I think JD Power is the most credible source, with information available for free on the Internet, for evaluating customer satisfaction for home & auto insurance companies. Consumer Reports may be a good source, too, but you have to pay for their information.

However, just like it is important to thoroughly comparison shop for home & auto insurance to get the best price, it is smart to use multiple sources to evaluate an insurance company for customer service.

I have searched the Web, and unfortunately, I can’t find any other reliable resources to compare with JD Power.

Complaint Web sites are not objective. Insurance Web sites usually provide boiler plate facts, like the AM Best rating, when the insurance company was founded, etc. and they don’t have much useful information.

Other insurance Web sites have too much bias, either run by lawyers, body/repair shops, or disgruntled customers. Can you really get an unbiased opinion on Allstate or Farmers, from allstateinsurancesucks.com or farmersreallysucks.com? You can also find people on the Internet raving about how great both these companies are, and how they have been happy customers with them for years.

Even the Web sites I have reviewed by former claims adjusters and industry insiders are, in my opinion, biased and not reliable.

Maybe I’m biased, too, but I think my Web site has the most objective information on auto & home insurance on the Web, by showing you JD Power ratings, AM Best ratings, and complaint ratios for insurance companies, you can choose an insurance company without being swayed by a few people’s complaints or recommendations.

Now you know why the JD Power insurance company rankings are important, lets look at the JD Power 2011 national homeowners insurance study results.

There have been changes from the JD Power 2010 homeowners insurance study, and several major home insurance companies have been downgraded. No homeowners insurance companies were upgraded for 2011, from the 2010 study.

4 homeowners insurance companies have been downgraded from 4 power circles (better than most) to 3 power circles (about average).

3 homeowners insurance companies have been downgraded from 3 power circles (about average) to 2 power circles (the rest).

However, unlike my look at the 2011 JD Power auto insurance study, I took note of the raw scores for the 3 home insurance companies now rated lower than “about average,” to see how much below average they might be.

JD Power uses a 1,000 point scale to determine its rankings. The 2011 study average for overall satisfaction with homeowners insurance was 769 out of 1,000 points, up 19 points from 2010. But the lowest scoring homeowners insurance company, Travelers Insurance, with 732 points out of 1,000, is only 37 points, on the 1,000 point scale, away from average.

Also, the lowest rated homeowners insurance company with a 3 power circles (about average) rating is Liberty Mutual Insurance, with 750 out of 1000 points, which shows Travelers was only 18 points away, on a 1000 point scale, from being rated at 3 power circles (about average).

I’m not convinced the 3 homeowners insurance companies ranked at 2 power circles are providing significantly less customer satisfaction than home insurance companies rated 3 power circles, when in some cases they are within a few points of being rated “about average.”

My future blog posts will review leading insurance companies in-depth, to evaluate their customer service, and I will consider each company’s JD Power rating for auto & home insurance more closely.

For now, instead of declaring winners & losers (with one categorical exception), like I did with the 2011 auto insurance study review, I will list the downgrades, the 6 top scoring home insurance companies (two companies are tied for 3rd place), & the 7 bottom scoring (scoring was close enough to note the 6th & 7th lowest scoring companies) homeowners insurance companies, so you can sort the best home insurance companies from the not-so-good insurance companies. My last list will be for the few insurance companies rated lower than “about average” for both the auto & home insurance studies by JD Power.

First, let me note 4 homeowners insurance companies rated last year, were not rated this year, because JD Power was not able to get enough data because of these companies’ small market share, or lack of a presence nationally, since most of their customers are in small region of the USA. The fact JD Power did not have the proper data to rate these companies this year should not be considered negatively against the companies.

Homeowners insurance companies not rated this year are: Alfa Insurance, American National Property & Casualty, Fireman’s Fund, & Shelter Insurance, but I still list their 2010 JD Power homeowners insurance study ratings on my Web site.

Homeowners Insurance Companies downgraded from 4 power circles (better than most), in the JD Power 2010 homeowners insurance study, to 3 power circles (about average), in the JD Power 2011 homeowners insurance study, for overall satisfaction.
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1. Auto Club Group

2. Automobile Club of Southern California

3. Chubb Insurance

4. Country Insurance

Homeowners Insurance Companies downgraded from 3 power circles (about average), in the JD Power 2010 homeowners insurance study, to 2 power circles (the rest), in the JD Power 2011 homeowners insurance study, for overall satisfaction.

1. Metlife Insurance

2. Safeco Insurance

3. Travelers Insurance

The 6 Highest Rated Homeowners Insurance Companies

USAA — 5 Power Circles (among the best) 883 out of 1000 points

Amica Insurance — 5 Power Circles (among the best) 831 out of 1000 points

Auto-owners Insurance — 4 Power Circles (better than most) 806 out of 1000 points

Erie Insurance — 4 Power Circles (better than most) 806 out of 1000 points

State Farm Insurance — 4 Power Circles (better than most) 788 out of 1000 points

American Family Insurance — 4 Power Circles (better than most) 783 out of 1000 points

The 7 Lowest Rated Homeowners Insurance Companies (listed highest to lowest)

Farmers Insurance — 3 Power Circles (about average) 755 out of 1000 points

Mercury Insurance — 3 Power Circles (about average) 755 out of 1000 points

Encompass Insurance 3 Power Circles (about average) 751 out of 1000 points

Liberty Mutual Insurance — 3 Power Circles (about average) 750 out of 1000 points

Safeco Insurance — 2 Power Circles (the rest) 747 out of 1000 points

Metlife Insurance — 2 Power Circles (the rest) 742 out of 1000 points

Travelers Insurance — 2 Power Circles (the rest) 732 out of 1000 points

TWO-TIME LOSERS

2 Power Circles (the rest) for the JD Power 2011 auto insurance study & for the JD Power 2011 homeowners insurance study.

Metlife Insurance

Travelers Insurance

Many people pay too much for their insurance because they never shop for better rates, or if they do shop, they don’t check the rates of enough companies. For a lot of people, the best auto & home insurance companies are the ones with the coverage they need at a lower price. With auto & home insurance, you don’t get better service or coverage because you pay more. Some of the best companies have competitive rates. Some companies charge twice as much as others for the same coverage. But no single company has low rates for everyone. You have to shop with all the leading companies, to find the company with the best coverage and best price for you.

What do you think of the JD Power study results? Comment on my facebook page. Follow me on Twitter to keep up on which companies I’ve reviewed, & new blog entries at CarInsWatch. See auto & home insurance company reviews rating each company’s pricing, claims handling and customer service for over 40 different companies; customer complaint analysis for the major insurance companies in each US State; term life insurance rate surveys and more, at smartshopyourcarinsurance.com.