Do Homeowners Have Enough Insurance?

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Hot on Erie's heels, USAA and Amica Mutual also received overall ratings matching Erie's -- five out of a possible five points for overall satisfaction -- but they were not included in the official rankings.

USAA policies are available only to the military community and their immediate families. Amica Mutual is not included in the official rankings because it did not meet the sample size criteria established by J.D. Power and Associates, a marketing information services firm.

However, J.D. Power said Amica's sample size was large enough to render the data statistically sound.

"Erie Insurance Group, USAA and Amica Mutual are the benchmarks for the industry in terms of customer satisfaction," said Frank Forkin, a partner at J.D. Power.

Larger companies, State Farm earned only four out of five points for overall satisfaction and Allstate earned only three. Farmers performed worst over all with only two of five points in every category except ease of contact where it earned three. Traveler's fared only slightly better scoring two points overall and three points in all other categories.

According to some websites a consumer insurance information Web site, Erie may have earned its spot at the top by offering the lowest annual premiums, but Amica and USAA had the highest prices, indicating price wasn't a major factor overall.

"Price doesn't appear to be as important because the annual premium consumers pay for their home owners insurance policy remains relatively stable year-to-year, and they do not review their policy very frequently," said Forkin.

They should.

The J.D. Powers study found that home owners place the most importance on the actual coverage their policy provides if they need to file a claim, but at claim filing time home owners could be in for a rude awakening.

Home improvements, appreciation, asset acquisition, and home-based businesses are among numerous factors that warrant an annual check-up of insurance coverage to make sure it's adequate when you do have to file a claim.

Princeton, NJ-based Marshall & Swift, a building cost information provider, says 70 percent of all homes in the United States are underinsured to begin with, often because home owners confuse "market value" with "replacement value."

Market value, which includes the cost of land, is what a buyer will pay for your property. Replacement value is what it would cost today to rebuild or to replace a loss. Be sure you have guaranteed replacement value coverage; otherwise your insurance may only pay the depreciated value for damaged or destroyed items.

In addition to overall ratings, J.D. Power rated insurers for "fulfillment of commitments," "ease of contact" and "accuracy of billing".

The survey also said customer service, especially among those who have filed a claim, is also of paramount importance with respect to customer satisfaction and loyalty.

Only 18 percent of consumers report that they filed a claim against their homeowners insurance policy in the last three years, compared to nearly 35 percent of those who filed a claim against their auto insurance policy during the same period.

Home owners who filed a homeowners insurance claim were just as satisfied with their insurance company as those who had not, according to the study.

When policyholders do file a claim, they place the most importance on the fairness of the claim settlement and the length of time to settle it.

"While these are important areas to consumers, insurance companies are only doing an average job at satisfying them; therefore, these areas, along with keeping policyholders informed during the claims process, provide the greatest opportunity for improvement," Forkin said.

Home owners may be exhibiting blind loyalty to their insurance providers -- 87 percent of them keep the same company for at least three years, even when there could be wide differences in the price of a policy.

More than one-half of all consumers have maintained a relationship with only one company for their entire homeowners insurance experience, according to the survey.

"Loyal homeowners are generally far more satisfied with every aspect of their current insurance experience, with the only exception being premium prices," Forkin said.

"Loyal policy holders share similar satisfaction levels, in terms of premium prices, with those who have recently switched to a new insurance company. Consumers become content with their insurance company because they typically have multiple policies with their homeowners insurance company, making it more cumbersome to change carriers," he added.

To compare your insurance company against others in the survey visit the J.D. Powers site.

California's Department of Insurance allows residents of the Golden State to compare the cost of your homeowners insurance with other insurers on its Web site at. More general homeowners insurance information is available from the state department online.