Nearly half of US homeowners insurance customers have seen their premiums rise in the past year, marking the highest rate of insurer-initiated increases in over a decade, marking a shift in how customers perceive their loyalty towards their carriers.
According to the J.D. Power 2025 U.S. Home Insurance Study, 47% of homeowners insurance policyholders experienced a rate hike, with an even more pronounced impact among high lifetime-value customers.
The study highlights that these premium increases are occurring amid a year of inflation, severe weather events, and tighter 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.
Martin noted that 49% of high-value customers – those with higher average premiums and multiple insurance products – reported insurer-initiated rate increases, making them more likely to consider switching carriers.
The upward trend in homeowners insurance premiums is not isolated to a single region. A recent report from Insurify projects that the average annual cost of home insurance nationwide will rise by 8% in 2025, reaching $3,520 for a home valued at $400,000.
The report also points out that this estimate does not include the potential impact of new tariffs on building materials, which could further increase premiums. States such as Louisiana, Iowa, and Minnesota are expected to experience double-digit rate increases due to recent natural disasters.
Customer loyalty is being tested as a result of these price hikes. Among homeowners who faced a premium increase and are unlikely to renew, 43% cited the recent price hike as their reason for considering a switch.
J.D. Power’s study also found that customers who experience insurer-initiated increases report lower trust in their provider and are less likely to describe their insurer as easy to work with.
The risk of losing high-value customers is significant for insurers. The survey found that 45% of high-value customers who are unlikely to renew with their current carrier blame repeated price increases, compared to 30% of low lifetime-value customers who gave the same reason.
This trend could threaten long-term revenue streams for insurers, as high-value customers are typically the most profitable segment in the property and casualty market.
The study also points to the importance of communication in mitigating the negative effects of premium increases. When insurers clearly explain the reason for a rate hike and offer options to help customers lower their premium, overall satisfaction scores improve.
Customers who understand the reason for the increase and are given options report an average satisfaction score of 721 out of 1,000, which is 184 points higher than those who are left without an explanation or options, and 33 points higher than those who did not experience a premium increase.
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