Homeowners and renters insurance rates are outpacing both inflation and the average rate increases experienced by auto insurance customers, according to the J.D. Power 2024 U.S. Home Insurance Study.
According to data from the report, rising premiums have led to a significant increase in the proportion of customers buying new insurance because the premiums are too expensive.
“The average purchase rate for home insurance customers has risen to a record high of 6.8% by the second quarter of 2024, up from 5.9% two years ago,” said Breanne Armstrong, director of insurance information at J.D. Power.
“With few options, many consumers will end up sticking with the status quo, but insurers need to recognize that steady premium increases pose a retention risk and have a negative impact on customer satisfaction.”
According to JD Power, 37% of home insurance customers who experienced insurer-driven rate increases are likely to consider new insurance, with higher prices the most common reason cited. Customers who experienced insurer-driven rate increases had a customer satisfaction rating of 594 out of 1,000 points, 92 points lower than customers who did not experience insurer-driven rate increases.
But while 6.8% of all home insurance customers are actively searching for new insurance, only 2.2% of homeowners have switched policies as a result, down from 2.5% two years ago, the report found.
J.D. Power noted that there were fewer home and auto insurance bundles in 2024 compared to 2023. However, it appears that more customers are considering switching their auto insurance without changing their home insurance: 21% of customers said they would “definitely” switch their home insurance if they switched their auto insurance, down from 24% in 2023.
The report also shows that among customers whose insurers implemented rate increases, those who fully understood the reasons for the rate increase were 14 percentage points less likely to purchase new insurance than those who did not understand the reasons for the rate increase.
They are also 21 percentage points more likely to strongly agree that insurers put their customers’ interests first.
Additionally, J.D. Power revealed that Chubb topped the homeowners insurance rankings with a score of 688, followed by AIG with 680 and Amica with 679.
Erie Insurance ranked first in the renters insurance category for the second year in a row with a score of 713. Amica came in second with 695 points and Lemonade came in third with 682 points.
