Customer satisfaction with auto insurers increasingly surpassesthat of carriers for homeowners coverage, a new study by J.D. Powerand Associates reports.

The Westlake Village, Calif., firm said the gap between the homeand auto insurance sectors has steadily widened since 2004, withhomeowners insurance customer satisfaction remaining essentiallyflat during the past five years.

Findings on consumer reaction to the two lines were contained inthe J.D. Power and Associates 2008 Homeowners InsuranceStudySM.

The study measures customer reactionby examining five keyfactors: policy offerings, price, billing and payment, interaction,and claims.

Customer satisfaction with homeowners insurance during the pastfive years shifted only one index point from an average score of753 on a 1,000-point scale in 2004 to 752 in 2008, J.D. Powersaid.

Although some improvements were noted in the policy offeringfactor, the lack of improvement in customer satisfaction withhomeowners insurance providers is primarily driven by declines inscores in the claims and pricing factors, the marketing informationservices firm said.

In contrast, satisfaction with auto insurers has steadilyincreased during the same time period--up 25 points from 2004 to ascore of 787 in 2008, according to the J.D. Power and Associates2008 National Auto Insurance StudySM. In particular, satisfactionwith pricing was found to have driven steady improvement insatisfaction with auto insurance providers.

Jeff Leiman, senior director of the insurance practice at J.D.Power and Associates, in a statement said, "Catastrophic stormsthat have occurred during the past five years have motivated manyhomeowners insurance providers to limit their exposure in thegeographic areas that are most at risk. As a result of heavylosses, coverage in the affected areas is more difficult to obtainand policies are more expensive nationwide."

Customer satisfaction levels, the study found, are particularlyhigh among policyholders who bundle multiple policies with theirhomeowners insurance provider. Satisfaction averages 782 whenpolicyholders bundle home insurance and auto insurance policies,compared with an average of 689 among policyholders who do notbundle policies.

"Bundling multiple policies delivers benefits to bothpolicyholders and providers," said Mr. Leiman. "The practice allowsproviders to capture additional business, and policyholders toqualify for additional discounts. More than 90 percent of those whobundle policies renew those policies with their provider, whileonly 82 percent of non-bundlers do the same."

Lincoln, R.I.-based Amica Mutual ranks highest in the survey fora seventh consecutive year among homeowners insurance providers,performing particularly well in all five factors that contribute tooverall customer satisfaction.

Following Amica, first in the rankings at 830 on a 1,000-pointscale, are Auto Club of Southern California (782), CincinnatiInsurance (781), Erie Insurance (779) and Shelter (774). USAA, aninsurance provider open only to the U.S. military community andtheir families and therefore not included in the rankings, alsoachieves a high level of customer satisfaction with 877.

Among 26 insurers, the bottom five were Allstate (735),Travelers (722), Hanover (720), American International Group (714)and Fireman's Fund (692).

The study also finds the following homeowners insurancetrends:

Nearly 50 percent of homeowners insurance policyholders reportbeing offered an annual policy review. Satisfaction levels areconsiderably higher among policyholders who receive this offer thanthose who do not.

In 2008, 42 percent of homeowners report experiencing anincrease in premiums. While a premium increase can have a negativeimpact on customer satisfaction, the adverse effects can bedramatically minimized through effective notification topolicyholders, followed by a discussion of policy alternatives,J.D. Power said.

The firm said its 2008 Homeowners Insurance Study is based onresponses from more than 12,900 homeowners insurance policyholders.The study was fielded in May and June 2008.