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Could Home-Coverage Trend Help Retirees?

The odds are good that costs associated with housing—including home insurance—will eat up much of your income in retirement. So it’s worth checking out where your homeowners’ insurance company ranks in a new survey of consumers’ satisfaction with their policies and coverage, especially since those rankings reflect industry strategies that could lower your bills.

J.D. Power and Associates last week published its annual survey of homeowners’ insurance companies. The report measures policyholders’ satisfaction in five areas: billing and payment, claims, interaction, policy offerings, and price.

J.D. Power found that overall satisfaction in 2012 with homeowners’ insurance companies averages 785, on a 1,000-point scale—the highest level in the 12 years of the study. J.D. Power said the increased satisfaction levels stem from consumers’ interest in bundling homeowners’ insurance with other coverage (like auto insurance); in doing so, some policyholders are able to reduce premiums and simplify billing.

To the extent that bundling is on the rise, it could help retirees trim one of their biggest expenses. In figures released last week by the Bureau of Labor Statistics, the average household headed by an individual age 65 to 74 had annual expenditures in 2011 of $44,646. Of that, $15,105, or 33%, went to housing, the single largest spending category. That included an average of $1,551 for maintenance, repairs and insurance.

The top three companies: Amica Mutual in Lincoln, Rhode Island; ACSC (Automobile Club of Southern California) in Los Angeles; and Erie Insurance in Erie, Pa. (Also among the highest ratings in the survey: USAA in San Antonio, Texas, a provider that primarily serves U.S. military personnel and their families and isn’t included in the official rankings.)


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About Encore

  • Encore examines the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities and priorities of today’s retirees. The blog also explores news that affects retirement, from the Wall Street Journal Digital Network and around the web. Lead bloggers are reporter Catey Hill and senior editor Jeremy Olshan. Other contributors include The Wall Street Journal’s retirement columnists Glenn Ruffenach and Anne Tergesen; the Director for the Center for Retirement Research at Boston College, Alicia Munnell; and the Director of Research for Pinnacle Advisory Group, Michael Kitces, CFP.