Homeowners Insurance Premium Increases Threaten Customer Loyalty, Long-Term Profitability, J.D. Power Finds

Amica Ranks Highest in Homeowners and Renters Insurance Segments

TROY, Mich.--(BUSINESS WIRE)--
Almost half (47%) of homeowners insurance customers in the United States have experienced a premium increase in the past year, the highest rate of insurer-initiated rate raises in more than a decade, according to the J.D. Power 2025 U.S. Home Insurance Study,^SM released today. The phenomenon is even more pronounced among high lifetime-value customers,¹ causing increased likelihood of customer defection and loss of critical long-term revenue streams.

“In a year marked by inflation, severe weather and tightening reinsurance markets, home insurance premiums have risen sharply in many parts of the country. While these increases often reflect real cost pressures, they’re also eroding trust and driving customers to shop for alternatives,” said Craig Martin, executive director, global insurance intelligence at J.D. Power. “The issue is particularly acute in the high-value customer segment, where 49% of customers have experienced an insurer-initiated rate increase. These customers represent the most profitable segment of the property and casualty insurance market, and they are far more likely to take their business to a competitor when they experience repeated rate increases.”

Following are some key findings of the 2025 study:

• Rising premiums erode customer loyalty: Among homeowners insurance customers who experienced a premium increase and say they are unlikely to renew, 43% cite the recent price hike as the reason for switching. Customers who experience an insurer-initiated rate increase also have significantly lower levels of trust in their insurer and are less likely to say their insurer is easy to work with.

• High-value customer relationships at risk: Homeowners with higher average premiums and multiple insurance products are more likely to cite repeated price increases as a key reason for switching carriers. Among customers who are unlikely to renew with their current carrier, 45% of high-value customers say they will not renew due to multiple price increases over time. By contrast, just 30% of low lifetime-value customers who are unlikely to renew cite repeated price increases as their reason they will not renew.
  

• Proactive communication can offset negative effects of rate increases: When insurers clearly explain the reason for a rate increase and provide options to help customers lower their premium, the negative impact of that increase can be eliminated. Among customers who experience a rate increase but fully understand the reason and are offered options, overall satisfaction averages 721 (on a 1,000-point scale). This is 184 points higher than the average among customers who do not understand the reason and are not presented with options—and 33 points higher than the average among those who experience no premium increase at all.

Study Rankings

Amica ranks highest in the homeowners insurance segment, with a score of 705. Chubb (677) ranks second and Erie Insurance (676) ranks third.

Amica ranks highest in the renters insurance segment, with a score of 711. Erie Insurance (705) ranks second and CSAA Insurance Group (AAA) (689) ranks third.

See the rank charts for each segment at http://www.jdpower.com/pr-id/2025106.

The U.S. Home Insurance Study examines overall customer satisfaction with two distinct personal insurance product lines: homeowners and renters. Satisfaction in both segments is measured across seven core dimensions: product/coverage offerings; problem resolution; digital channels; people; price for coverage; trust; and ease of doing business. The 2025 study is based on responses from 14,511 homeowners and renters via online interviews conducted from July 2024 through May 2025.

For more information about the U.S. Home Insurance Study, visit https://www.jdpower.com/business/insurance/us-home-insurance-study.

About J.D. Power

J.D. Power is a global leader in consumer insights, advisory services, and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, J.D. Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 55 years. The world's leading businesses across major industries rely on J.D. Power to guide their customer-facing strategies.

J.D. Power has offices in North America, Europe and Asia Pacific. To learn more about the company's business offerings, visit JDPower.com/business. The J.D. Power auto-shopping tool can be found at JDPower.com.

About J.D. Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info

¹ J.D. Power defines high lifetime-value customers as those with higher annual premiums and a higher proportion of product and service needs purchased with one insurance carrier.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250916810246/en/

Media Relations Contacts

Joe LaMuraglia, J.D. Power; East Coast; 714-621-6224; [email protected]
John Roderick; East Coast; 631-584-2200; [email protected]

Source: J.D. Power