Across the United States, homeowners and renters have been receiving letters from their insurance providers letting them know they are being dropped, as a combination of catastrophic events, rising costs and regulatory pressures have majorly strained property and casualty (P&C) insurance business models.
According to J.D. Power’s 2023 US Home Insurance Study, this ongoing situation represents opportunity for the carriers that remain, but at the same time, also comes with a need to understand the potential effects that these actions have on customer perceptions.
Data from the survey shows that overall homeowner satisfaction currently sits at 819 (on a 1,000-point scale), which is flat vs. 2022, and renter satisfaction increases one point this year.
Additionally, average filed rate increases for home insurance have sat within the double digits each month since February 2023.
Interestingly, 48% of homeowners insurance customers impacted by a rate filing received a rate increase of 5% or more in 2022.
Meanwhile, according to J.D. Power, 57% majority of homeowners who switched carriers in the past year did so for a better price.
Among those who have switched insurers within the past year, bundling rates declined 10 percentage points.
J.D. Power also stated that Erie Insurance ranks highest in the homeowners insurance segment, with a score of 856.
Amica comes in second place at 844, with Auto-Owners Insurance securing third place with 834.
Erie Insurance also ranks highest in the renters insurance segment with a score of 881, with American Family coming in second place with a score of 856 and Lemonade ranking third with a score of 854.
Breanne Armstrong, director of insurance intelligence at J.D. Power, commented: “We’ve all seen the headlines about insurers leaving states like California and Florida where catastrophic weather claims have been at an all-time high, but this pattern is playing out nationwide, affecting thousands of homeowners in every state.
“Insurers are reworking their actuarial maps, confronting state regulations that cap rate increases and struggling with profitability. For customers, this combination of steadily rising rates and sudden abandonment can create irreparable damage to brand loyalty and perceptions of trust. However, it also creates an opportunity for carriers that can come in and absorb these customers. This could be a real make-or-break moment for many carriers.”
