Rising Home Insurance Rates Hamper Customer Satisfaction and Drive Policy Shopping, Study Finds

A record number of consumers are shopping for new policies, but few are actually making the switch.

Julia Taliesin
Written byJulia Taliesin
Julia Taliesin
Julia TaliesinInsurance Content Writer

Julia Taliesin is an insurance content writer at Insurify. She began her career as a journalist, covering local government and business in Somerville, Mass.

Chris Schafer
Edited byChris Schafer
Chris Schafer
Chris SchaferSenior Editor
  • 15+ years in content creation

  • 7+ years in business and financial services content

Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.

Featured in

media logomedia logomedia logomedia logo
John Leach
Reviewed byJohn Leach
Photo of an Insurify author
John LeachSenior Insurance Copy Editor
  • Licensed property and casualty insurance agent

  • 8+ years editing experience

John leads Insurify’s copy desk, helping ensure the accuracy and readability of Insurify’s content. He’s a licensed agent specializing in home and car insurance topics.

Featured in

media logo

Published September 25, 2024 at 12:00 PM PDT | Reading time: 2 minutes

Advertiser Disclosure

At Insurify, our goal is to help customers compare insurance products and find the best policy for them. We strive to provide open, honest, and unbiased information about the insurance products and services we review. Our hard-working team of data analysts, insurance experts, insurance agents, editors and writers, has put in thousands of hours of research to create the content found on our site.

We do receive compensation when a sale or referral occurs from many of the insurance providers and marketing partners on our site. That may impact which products we display and where they appear on our site. But it does not influence our meticulously researched editorial content, what we write about, or any reviews or recommendations we may make. We do not guarantee favorable reviews or any coverage at all in exchange for compensation.

Why you can trust Insurify: Comparing accurate insurance quotes should never put you at risk of spam. We earn an agent commission only if you buy a policy based on our quotes. Our editorial team follows a rigorous set of editorial standards and operates independently from our insurance partners. Learn more.

Share

Surging home and renters insurance rates are eroding customer satisfaction and pushing policyholders to shop for new options, according to J.D. Power’s 2024 U.S. Home Insurance Study.

Home and renters insurance costs have surpassed inflation, the study finds. Car insurance rates have increased as well, though less dramatically, according to J.D. Power’s analysis.

Consumers are feeling the pinch. A record 6.8% reported they were shopping for new policies, yet only 2.2% are actually switching policies.

“The average shopping rate among home insurance customers has climbed to a record high of 6.8% through the second quarter of 2024, up from 5.9% two years ago,” Breanne Armstrong, director of insurance intelligence at J.D. Power, said in a release. “Many shoppers have ended up staying put because there are so few alternatives available, but carriers need to recognize that steady rate increases put policy retention at risk and have a negative effect on customer satisfaction.”

J.D. Power’s research also found that policy bundling has also declined since last year, as consumers have shown a growing desire to switch their auto policy without changing their home insurance.

Could better communication help?

J.D. Power’s study found that effective communication from insurance companies makes a difference when it comes to retaining customers. Policyholders who understand the reason for a rate increase were 14% less likely to shop for a new policy and 21% more likely to believe the insurer puts its customers’ interests first, according to the study.

Premium increases also significantly affect satisfaction: Ratings were almost 100 points lower among customers who received an increase than for customers who didn’t, according to the study. Chubb earned the highest overall customer satisfaction ranking among home insurance companies in the study. Erie Insurance ranked highest for renters.

What’s next: Comparison shopping may be the key to customer satisfaction

The average cost of home insurance rose by 19.8% from 2021 to 2023, and the average annual rate today is $2,377, according to Insurify’s homeowners insurance report. Insurify projects another 6% increase by the end of 2024, driving the national average to $2,522.

Though few homeowners are actually switching their policies, comparing policies is one of the best ways to save money on premiums, according to the Insurance Information Institute. But many homeowners aren’t even aware of the possible savings.

“Many homeowners buy home insurance when they first take out their mortgage. Then, they rarely revisit it because they pay it through their escrow account,” said Insurify data journalist Cassie Sheets.

“‘Out of sight, out of mind’ is fine when your insurance cost is relatively stable, but homeowners have seen significant rate hikes over the past few years,” Sheets said. “If they haven’t recently compared insurance rates with a few different companies, they could be missing out on a policy that costs hundreds of dollars less per year.”

Julia Taliesin
Julia TaliesinInsurance Content Writer

Julia Taliesin is an insurance content writer at Insurify. She began her career as a journalist, covering local government and business in Somerville, Mass. She reported multiple investigative stories about municipal finances and budget allocation, building development and inspection, and personnel. When the pandemic began she became a de facto public health reporter, writing daily and weekly reports using available data to quickly communicate rates of infection and city response.

She's worked for print and digital outlets, writing everything from quick-hit breaking news to long-form community features. More recently, Julia managed content strategy at a startup creating a social platform for licensed nurses, overseeing a team of nurse freelancers and editing interview transcripts and news articles for publication.

She holds a Bachelor's degree in communications from Simmons University, with a focus in journalism. Outside of work, Julia enjoys working on crafting projects, learning about homesteading, and singing in cover bands.

Chris Schafer
Edited byChris SchaferSenior Editor
Chris Schafer
Chris SchaferSenior Editor
  • 15+ years in content creation

  • 7+ years in business and financial services content

Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.

Featured in

media logomedia logomedia logomedia logo
John Leach
Reviewed byJohn LeachSenior Insurance Copy Editor
Photo of an Insurify author
John LeachSenior Insurance Copy Editor
  • Licensed property and casualty insurance agent

  • 8+ years editing experience

John leads Insurify’s copy desk, helping ensure the accuracy and readability of Insurify’s content. He’s a licensed agent specializing in home and car insurance topics.

Featured in

media logo