JD Power released its 2014 US Household (Home & Renters, and starting this year, life insurance) Insurance & Bundling Customer Satisfaction Study last month. Although I think the annual JD Power customer surveys are useful, as an objective measure of auto, home, or life insurance company customer satisfaction, the power circle ratings used by JD Power to rate each insurance company, can be misleading about the real quality of the companies surveyed. This review & analysis of the numerical scores for the home & tenants insurance companies surveyed in the JD Power 2014 US Household Insurance & Bundling Customer Satisfaction Study will let you know the best & worst companies, and which companies, in spite of higher ratings, are really performing close to average, or about the same as lower rated companies.
The Best & Worst US Insurance Companies for Homeowners Insurance Customer Satisfaction, based on the 2014 JD Power Customer Survey
This annual JD Power study used to rate the major US companies selling homeowners insurance for customer satisfaction. Starting in 2013, in addition to the home insurance customer satisfaction ratings, the study includes company ratings for customer satisfaction with renters insurance. Now in 2014, customer satisfaction for life insurance is included in this study. I’ll write a separate review analyzing the life insurance customer satisfaction ratings, so this review will focus on Home & Renters customer satisfaction.
Since 2013, the homeowners insurance customer satisfaction ratings include companies like Progressive & GEICO, which do not insure homes, but sell the home & renters insurance of other companies, and offer a bundling discount to their car insurance customers. Although GEICO & Progressive do not insure homes, and act as agents for other companies when you buy home or renters insurance from them, rating them in this study is worthwhile, because many people purchase home or renters insurance from GEICO & Progressive each year. It’s important for consumers to have some measure of customer satisfaction, if they are buying or bought home insurance from Progressive or GEICO. In addition to knowing Progressive & GEICO’s performance as an agent in this study, consumers need to consider the customer satisfaction of the insurance company represented by GEICO or Progressive to insure your home. Both GEICO & Progressive partner with several home insurance companies, ranging from companies performing way below average (Homesite) to about average (Liberty Mutual) to above average (Chubb) in previous JD Power property insurance studies. Which home insurance companies GEICO & Progressive use have varied over the years, and what company they use for you can depend on your type of home, location, state where your home resides, and other factors. If you bought home insurance from GEICO or Progressive, contact them to find out the name of the company insuring your home, if you do not know it.
This study rates companies separately for homeowners insurance customer satisfaction and renters insurance customer satisfaction. I don’t think the renters insurance ratings and study results are very useful for choosing an insurance company. Claims handling was not considered in the renters insurance study, except for State Farm and Allstate. GEICO and State Farm received 5 power circle ratings for renters insurance customer satisfaction, but only score 9 points and 8 points (respectively) higher than the average on a 1,000 point scale. Neither company rated that high for homeowners insurance customer satisfaction (GEICO and actually scored below the homeowners insurance customer satisfaction average). With the exception of USAA, none of the companies distinguished themselves as above average for renters insurance customer satisfaction.
Choosing a Renters Insurance Company
Renters insurance, regardless of the company you choose, is fairly inexpensive. Your savings is likely to be more influenced by how much you save on your auto insurance with a multi-policy discount, than the price of each company’s renters insurance If you are a renter, shop around for the best auto insurance for you, where you can see BIG differences in price among companies for the same coverage, and consider buying your renters insurance from the same company.
If you don’t have a car, or you have concerns about choosing your auto insurer for renters insurance, State Farm did score above average for renters and homeowners insurance customer satisfaction in the 2014 study, and received a 5 power circle rating (among the best) in the category of claims for renters insurance.
Companies scoring below average for renters insurance customer satisfaction you may want to avoid are: Liberty Mutual, Allstate, Safeco, American Family and Farmers. Allstate, the only company rated for claims in the renters insurance study other than State Farm, received the lowest power circle rating of two power circles in this category. American Family scored low in renters insurance customer satisfaction, but scored above average in homeowners insurance customer satisfaction, and was rated four power circles (better than most) for claims for homeowners insurance, which should be relevant to renter insurance customers, too.
Why you need to read this review
Although JD Power insurance studies are useful, I think people make the mistake of relying on each company’s rating. You need to look beyond the power circle rating system used by JD Power, to know which companies really have better, worse, or average customer satisfaction. Some companies, rated above average with four or five power circles, actually scored much closer to average than some other top-rated companies. Some companies scored much better or worse than other companies with the same rating.
Fortunately, in addition to each company’s power circle rating, the JD Power publishes in their news release for the 2014 study the point score, on a 1,000 point scale, for each rated company.
Here’s why each company’s point score matters:
Allstate insurance scored 789 out of 1,000 points in the 2014 JD Power homeowners insurance Customer Satisfaction study, and was rated 3 power circles (about average) for overall homeowners insurance customer satisfaction. Liberty Mutual Insurance scored 767 out of 1,000 points, 22 points (2.2%) below Allstate, but also received a three power circle rating. Farmers, Travelers, and Progressive scored even lower, but also received a three power circle rating. Progressive scored 763 out of 1,000 points, which is 27 points (2.7%) below the study average of 790 out of 1,000 points, but still received an “about average” rating. A 2.7% difference may not seem like much, but given the large number of unhappy customers the insurance industry is known for, a few percentage points can mean a lot towards receiving acceptable service. The top scoring company (other than USAA, which is in a class of itself) scored 839 out of 1,000 points, which is 4.9% above the average. So, its important to know a company like Allstate, scoring much higher than other companies with the same JD Power rating, actually has a higher level of homeowners insurance customer satisfaction.
This review analyzes the home insurance customer satisfaction scores from the study, ranking the highest scoring companies to the lowest scoring companies from best to worst, and looks at each company’s ratings for factors considered, like company interaction, policy offerings, price, billing and payment, and claims. You can read definitions of these factors in this review here. This review will make it easy for you know which companies really are performing above or below average.
The information I provide will help you avoid thinking it might be worth paying more for a company with a higher rating, when its actual home insurance customer satisfaction score is not far from average or lower rated companies. Or, let you know if a company’s score is higher or lower than other companies with the same rating, so you can avoid lower scoring, below average companies.
Not all the companies on this list sell home or renters insurance in every state. Not everyone will qualify for every company, based on their recent claims history, type age, or condition of their residence, or other factors. Use this list to see how your homeowners insurance company scored, and use the ads at the top and bottom of this page to compare quotes from other major home insurance companies in your state.
JD Power 2014 US Homeowners Insurance Customer Satisfaction Study: 22 Major Companies Ranked from Best to Worst for Overall Customer Satisfaction
USAA is in a class by itself, receiving the highest numerical score in the study by far. Although the second and third highest scoring companies also received the highest rating of five power circles for overall home insurance customer satisfaction, USAA provides much higher satisfaction, as measured by this study.
1,000 points is a perfect score.
1. USAA insurance — 903 points. USAA scored 903 out of 1,000 possible points (90.3%), 6.4% more than the second highest scoring company, and 11.3% (113 points) above the study average score. Unfortunately, USAA restricts eligibility for its insurance to the US military, their spouses & children, and honorably discharged veterans. But if you qualify, you should consider this company to insure your home.
2. Amica insurance — 839 points. Amica scored 839 points out of 1,000 possible points (83.9%). which is 49 points (4.9%) above the study average. If USAA is not an option for you, Amica may be your best choice for homeowners insurance customer satisfaction.
Only USAA & Amica were rated at five power circles (among the best) for all categories assessed in the study: company interaction, policy offerings, price, billing and payment, and claims.
3. Auto-Owners insurance — 829 points. Auto Owners scored 829 points out of 1,000 possible points (82.9%), 10 points (1%) below Amica, but scored 39 points (3.9%) above the study average. Auto-Owners received a five power circle rating for overall home insurance customer satisfaction, but only four power circles in the categories of price, billing & payment, and claims. If you are not eligible for USAA, and Auto-Owners has a much better price for the home insurance coverage you need than Amica, homeowners customer satisfaction is only slightly less with Auto-owners than Amica, as measured by this JD Power study.
All but the last company in this next group of four companies are rated 4 power circles (better than most) for overall home insurance satisfaction, but only one of them, American Family was rated higher than about average for the category of claims. These companies scored within a range of 9 points (.9), making their level of homeowners insurance customer satisfaction about the same, with State Farm & Erie insurance being slightly better.
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5. Erie insurance — 810 points. Erie scored 810 points out of 1,000 possible points (81.0%), scoring only 3 points below State Farm, and scoring 20 points (2.0%) above the study average.
6. American Family home insurance — 805 points. American Family scored 805 points out of 1,000 possible points (80.5%), scoring 8 points (.8%) below State Farm, but 15 points (1.5%) above the study average. American Family was the only company among State Farm, Erie, & Auto Club of SC to receive a 4 power circle rating (better than most) in the category of claims in this JD Power Study.
7. Automobile Club of Southern California home insurance — 804 points. Auto Club of SC scored 804 points out of 1,000 possible points (80.4%), nine points (.9%) below State Farm, but 14 points (1.4%) above the study average. Although Auto Club of SC received a 4 power circle rating for overall home insurance customer satisfaction, it received the highest rating of 5 power circles (t average) for the category of pricing.
The next six companies scored close to the study average, and rated three power circles (about average) for overall homeowners insurance customer satisfaction, but some of these companies rated above or below for important categories, like pricing, claims, and company interaction, which I will point out to you.
8. The Hartford — 795 points. Hartford scored 5 points (.5%) above the study average, scoring 795 points on the 1,000 point scale (79.5%). The Hartford received a 3 power circle rating (about average) for overall home insurance customer satisfaction and all categories, except the category of pricing, where The Hartford was rated 4 power circles (better than most).
9. COUNTRY insurance — 792 points. COUNTRY scored 792 points out of 1,000 possible points (79.2%), three points (.3%) below The Hartford but 2 points (.2%) above the study average. Country received a 3 power circle rating (about average) for overall home insurance customer satisfaction and in each category used as factor for the overall rating.
10. Mercury insurance — 791 points. Mercury scored 791 points out of 1,000 possible points (79.1%), four points (.4%) below The Hartford and only one point (.1%) above the study average. Mercury received a 3 power circle rating (about average) for overall home insurance customer satisfaction, but rated four power circles (better than most) in the categories of pricing and company interaction. However, Mercury received the lowest rating of two power circles in the category of claims.
2014 JD Power US Homeowners Insurance Customer Satisfaction Study Average Score: 790 of 1,000 points (79.0%).
11. Allstate insurance — 789 points. Allstate scored 789 points out of 1,000 possible points (78.9%), and one point (.1%) below the study average. Allstate received a 3 power circle rating (about average) for overall home insurance customer satisfaction and all categories, except the category of claims, where Allstate received the lowest rating of two power circles.
12. CSAA / AAA NCNU insurance — 788 points. CSAA / AAA of Northern California, Nevada, & Utah scored 788 points out of 1,000 possible points (78.8%), two points (.2%) below the study average. AAA NCNU received a 3 power circle rating (about average) for overall home insurance customer satisfaction and all categories.
13. GEICO insurance — 788 points. GEICO scored the same as CSAA, 788 points out of 1,000 possible points (78.8%), and two points (.2%) below the study average. GEICO received a 3 power circle rating (about average) for overall home insurance customer satisfaction and most categories, except being rated four power circles (better than most) for pricing, and receiving the lowest rating of two power circles for company interaction. GEICO, like Progressive, does not sell its own home insurance, but works with several other companies to sell their home insurance to GEICO auto insurance customers.
Although all the companies below are rated three power circles (about average) for overall homeowners insurance customer satisfaction in this study, their actual scores are below average, and should not be considered providing the same level of customer satisfaction as the companies from #1 to #13. If your home is insured with any of the companies below, it would be wise to shop to see if you can find a company with a better combination of coverage, price, and customer satisfaction.
14. Nationwide insurance — 780 points. Nationwide scored 780 points out of 1,000 possible points (78.0%), 10 points (1%) below the study average. Nationwide received a 3 power circle rating (about average) for overall home insurance customer satisfaction and all categories, but it scored 15 points (1.5%) lower than The Hartford, another company with the same three power circle rating in the study.
15. Safeco insurance — 773 points. Safeco scored 773 points out of 1,000 possible points (77.3%), 17 points (1.7%) below the study average. Safeco received a 3 power circle rating (about average) for overall home insurance customer satisfaction and all categories, but it scored 22 points (2.2%) lower than The Hartford, 16 points (1.6%) lower than Allstate, and 7 points (.7%) lower than Nationwide, other companies with the same three power circle rating in the study.
16. Farmers insurance — 772 points. Farmers scored 772 points out of 1,000 possible points (77.2%), 18 points (1.8%) below the study average. Farmers received a 3 power circle rating (about average) for overall home insurance customer satisfaction and all categories, except the category of claims, where it received the lowest rating of two power circles. Farmers scored 23 points (2.3%) lower than The Hartford, 17 points (1.7%) lower than Allstate, and 8 points (.8%) lower than Nationwide, other companies with the same three power circle rating in the study.
17. Metlife insurance — 770 points. Metlife scored 770 points out of 1,000 possible points (77%), 20 points (2%) below the study average. Metlife received a 3 power circle rating (about average) for overall home insurance customer satisfaction, but scored 25 points (2.5%) lower than The Hartford, 19 points (1.9%) lower than Allstate, and 10 points (1%) lower than Nationwide, other companies with the same three power circle rating in the study.
18. Liberty Mutual insurance — 767 points. Liberty Mutual scored 767 points out of 1,000 possible points (76.7%), 23 points (2.3%) below the study average. Liberty Mutual received a 3 power circle rating (about average) for overall home insurance customer satisfaction, but scored 28 points (2.8%) lower than The Hartford, 22 points (2.2%) lower than Allstate, and 13 points (1.3%) lower than Nationwide, other companies with the same three power circle rating in the study.
19. Travelers insurance — 764 points. Liberty Mutual scored 764 points out of 1,000 possible points (76.4%), 26 points (2.6%) below the study average. Travelers received a 3 power circle rating (about average) for overall home insurance customer satisfaction, but scored 31 points (3.1%) lower than The Hartford, 25 points (2.5%) lower than Allstate, and 16 points (1.6%) lower than Nationwide, other companies with the same three power circle rating in the study.
20. Auto Club Group / AAA insurance — 763 points. Auto Club scored 763 points out of 1,000 possible points (76.3%), 27 points (2.7%) below the study average. Auto Club received a 3 power circle rating (about average) for overall home insurance customer satisfaction, but scored 32 points (3.2%) lower than The Hartford, 26 points (2.6%) lower than Allstate, and 17 points (1.7%) lower than Nationwide, other companies with the same three power circle rating in the study.
21. Progressive insurance — 763 points. Progressive, like Auto Club, scored 763 points out of 1,000 possible points (76.3%), 27 points (2.7%) below the study average. Progressive received a 3 power circle rating (about average) for overall home insurance customer satisfaction, but scored 32 points (3.2%) lower than The Hartford, 26 points (2.6%) lower than Allstate, and 17 points (1.7%) lower than Nationwide, other companies with the same three power circle rating in the study.
Among companies scoring below average, this last company scored much lower than any of them, and received the lowest power circle rating for overall homeowners insurance customer satisfaction and all categories
22. The Hanover insurance — 697 points. The Hanover scored 697 points out of 1,000 possible points (69.7%), 93 points (9.3%!) below the study average. Hanover scored 66 points (6.6%) lower than the next lowest scoring companies, Progressive & Auto Club.
Now you know how 22 major home insurance companies in the US are rated for home insurance customer satisfaction, how did your home insurance company score? Start shopping now to save money and improve your service. You really can accomplish both these goals if you get price quotes from all the leading companies.
What do you think about my analysis of the 2014 JD Power homeowners insurance company customer satisfaction ratings? Which insurance companies do you think provide the best & worst service to their home & renters insurance customers? Comment on my facebook page. Follow me on Twitter for important insurance consumer news & new blog entries at CarInsWatch.