Homeowners and renters insurance costs have now surpassed both the rate of inflation and the average rate increases experienced by auto insurance customers, according to the J.D. Power 2024 US Home Insurance Study.

Data from the report shows that the rising rates has led to a significant increase in the percentage of customers shopping for new policies because their rates are too high.

Breanne Armstrong, director of insurance intelligence at J.D. Power, commented: ’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.

“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 has a negative effect on customer satisfaction.”

Among home insurance customers who receive an insurer-initiated rate increase, 37% are likely to shop for a new policy, according to J.D. Power. The top reason cited for shopping is high rates. Customer satisfaction among those who receive an insurer-initiated rate increase is 594, on a 1,000-point scale, 92 points lower than among those who did not receive an insurer-initiate rate increase.

However, while 6.8% of all home insurance customers are actively shopping for new polices, only 2.2% of homeowners switched policies as a result, down from 2.5% two years ago, the report reveals.

J.D. Power noted that bundling home and auto policies has decreased in 2024 compared with 2023. But, it appears that more customers are considering switching auto insurance without having to change their home insurance. 21% of customers say they “definitely will” also switch their home insurance if they switch their auto insurance, which is down from 24% in 2023.

The report also shows that among customers who receive an insurer-initiated rate increase, those who completely understand the reason for the increase are 14 percentage points less likely to shop for a new policy than those who do not understand the reason for the rate increase.

They are also 21 percentage points more likely to strongly agree that their insurer puts the interests of its customers first.

Furthermore, J.D. Power revealed that Chubb ranked the highest in the homeowners insurance segment, with a score of 688, followed by AIG with 680 and Amica with 679.

Erie Insurance ranks highest in the renters insurance segment for a second consecutive year, scoring 713. Amica came in second, scoring 695 and Lemonade ranks third with 682.