Homeowners Insurance Claimants Aren't Happy: J.D. Power

Ladies and gentlemen, buckle up! The homeowners insurance industry is in a tailspin, and it's all because of the claim cycle times and higher premiums. According to the J.D. Power 2025 U.S. Property Claims Satisfaction Study, customers are paying higher prices for slower service. The average claimant does not receive final payment on a claim until 44 days after the first notice of loss. This is a disaster waiting to happen!



The study found that the average claim cycle time from filing the claim to finished repairs is now 32.4 days, and the average cycle time from first notice of loss to final payment is now more than 44 days, the longest time since 2008. This is a nightmare for homeowners who are already dealing with the aftermath of a catastrophic event. The study also found that half the customers surveyed experienced insurer-initiated premium increases in the past 12 months. Overall satisfaction scores are 101 points lower (629 vs. 730) when insurers initiate a premium increase unrelated to having a claim than those who did not experience a premium increase.

The study also found that the sheer volume of catastrophic events, history of widespread premium increases and slow repair cycle times have conspired to strain customer satisfaction with the homeowners insurance claims experience. There were 27 catastrophic events in 2024 and 28 the year before. Homeowners insurers are currently losing roughly one nickel on every dollar of premium they collect, and with total cost of events like the California wildfires still being assessed, there seems to be no end in sight.

So, what can insurers do to mitigate these effects? Communication can be key to mitigating insureds’ aggravation. Overall satisfaction scores are more than twice as high (777) when customers say it is very easy to communicate with their insurer than when it is very difficult or somewhat difficult to communicate (337). Common failure points include often needing to leave voicemails, needing to call with questions repeatedly, and not receiving timely follow-up emails and text messages.

Insurers can also leverage digital tools to enhance customer satisfaction. The study indicates that overall satisfaction is higher among customers who use digital tools when filing a claim, submitting photos that are used in the estimate, and receiving proactive updates. Among digital channels, app usage results in the highest levels of satisfaction. This is particularly relevant for younger generations, with 87% of Gen Z and Millennials indicating they are comfortable managing the entire claims process digitally, compared to only 60% of Boomers and Pre-Boomers.

However, there are potential challenges in implementing these solutions. For example, while digital tools can speed up the claims process, they may also create higher expectations among customers, leading to dissatisfaction if the process takes longer than expected. Additionally, insurers need to ensure that their digital tools are user-friendly and accessible to all customers, regardless of their age or technological proficiency. This may require significant investment in technology and training for both customers and employees.

In summary, the increasing claim cycle times and higher premiums pose significant challenges to the financial stability and profitability of homeowners insurance companies. However, by improving communication, leveraging digital tools, and managing customer expectations, insurers can mitigate these effects and enhance their overall performance.