In today’s volatile market, U.S. home insurers are under increasing strain. Premium hikes, customer churn, and digital expectations are converging to redefine how consumers engage with home insurance. Amid intensifying price competition, many insurers risk becoming undifferentiated commodities—easily compared, easily replaced.

Here are the three most pressing challenges insurers must confront:

Home insurance has become increasingly commoditized.

Aggregators, digital quote engines, and direct-to-consumer models have made it easy for homeowners to shop based purely on price. With limited perceived differentiation between carriers, customers often select the lowest premium—eroding brand value and loyalty. This trend is shrinking margins and reducing opportunities to build lasting relationships.

Reason(s) for Selecting Home Insurance Provider: 

• 47% of respondents answered “price” as the top reason in the 2024 Home Insurance Study

Shopping Information 

• 32.4% of respondents said they have contacted another insurer to get a rate quote in the past 12 months
• From Loyalty Indicator & Shopping Trends (LIST): Main Reason Shopped for Homeowners Insurance?

19.9%

Browsing rates

19.0%

My rate was too high

12.4%

Looking to bundle

Source: J.D. Power 2024 U.S. Home Insurance Study^SM and J.D. Power Loyalty Indicator & Shopping Trends (LIST)

Insurers are being forced to raise rates due to escalating claims costs, inflation, and climate-driven losses. These increases are triggering shopping and switching:

Customers are more likely to shop or switch after receiving material premium increases.

Customers experiencing premium increases in their homeowners insurance are significantly more likely to have shopped for homeowners insurance in the last 12 months (29% vs. 21%).

Among those who indicated they switched insurers, the top reasons for leaving previous carrier:

41%

Recent price / rate increase

32%

Multiple increases over time 

Source: J.D. Power 2024 U.S. Home Insurance Study^SM

Many policyholders now see insurance as a transactional necessity – not a trusted partnership.

Reason they will be “probably / definitely likely” to shop in next 12 months:

53%

Price checking

28%

Recent price / rate increases

22%

Multiple increase over time

Customers who bundle their auto and homeowners tend to be more valuable, but the multi-product relationship also has the potential to impact shopping and attrition behavior.

• 47% of customers said they would probably or definitely switch their homeowners insurance if they switched auto insurance.

• Among homeowners, auto-home insurance bundlers, and people who have switched their auto insurance: 62% have also switched their home insurance since 2024 (LIST).

Source: J.D. Power 2024 U.S. Home Insurance Study^SM and J.D. Power Loyalty Indicator & Shopping Trends (LIST)

When companies change their prices without clearly explaining or justifying the reasons, customers feel confused or unfairly treated, which weakens their loyalty to the brand.

• More than half (56%) of customers who had home insurance premium increases in the past 12 months indicated that it was unexpected.
• Nearly 2/3 of customers (64%) who had home insurance premium increases say they don’t completely understand the reasons for the change. 

Source: J.D. Power 2024 U.S. Home Insurance Study^SM

Today’s homeowners – especially Millennials and Gen Z – expect seamless digital experiences, on-demand service, and personalized offerings. Many insurers are still catching up with legacy systems and disconnected customer journeys. Without digital ease and personal relevance, even satisfied policyholders may be tempted to explore newer, tech-enabled alternatives.

• The most important KPI driving Overall Satisfaction is providing a seamless experience across channels, according to the 2025 Auto Insurance Study. A similar trend is playing out in the Homeowners study.
• Gen Y and Z are significantly more likely to purchase their policies via a digital channel (website or mobile) than other generations. Nearly 1 in 3 complete their purchases without any human interaction.
• Once insurers are in the relationship, Gen Y/Z are very likely to use digital channels with more than half using mobile in the last 12 months. Among Gen Y/Z, those who have interacted via the mobile app in the last 12 months have an overall satisfaction of 106 points higher than those have never interacted via mobile.