High-Value Customer Loyalty Most at Risk as Homeowners Rates Climb

• By: Will Jones
• September 17, 2025

Nearly half of U.S. homeowners have seen their insurance premiums increase over the past year, signaling growing concerns over insurer loyalty and long-term profitability, according to the “2025 U.S. Home Insurance Study” from J.D. Power.

The study found that 47% of homeowners experienced insurer-initiated rate hikes, the highest level in more than a decade. For customers classified as “high lifetime-value”—those with higher annual premiums and multiple insurance products with a single insurer—that rate rises to 49%.

Inflation, severe weather and tighter reinsurance markets are among the pressures driving home insurance costs upward. While these factors are broadly acknowledged, they continue to impact loyalty and satisfaction.

The study revealed that, among homeowners who say they are unlikely to renew their policies, 43% point to recent price hikes as the reason. For high-value customers, repeated rate increases are cited by 45% as a reason for switching insurers. In contrast, just 30% of low lifetime-value customers who plan to leave cite repeated price hikes.

“In a year marked by inflation, severe weather and tightening reinsurance markets, home insurance premiums have risen sharply in many parts of the country,” said Craig Martin, executive director, global insurance intelligence at J.D. Power. “While these increases often reflect real cost pressures, they’re also eroding trust and driving customers to shop for alternatives.”

“The issue is particularly acute in the high-value customer segment, where 49% of customers have experienced an insurer-initiated rate increase,” Martin said. “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.”

The report suggests clear communication from insurers can help cushion the negative impact of rate hikes. When customers fully understand why their premiums increased and are offered options to reduce them, satisfaction ratings rise sharply.

A LendingTree analysis shows homeowners insurance rates rose 40.4% from 2019 through 2024. While rates were relatively stable from 2019 to 2021, they accelerated sharply in recent years: up 5.4% in 2022, 11% in 2023 and 11.4% in 2024.

The average annual U.S. homeowners insurance cost now stands at about $2,801. States seeing the steepest increases include Colorado, Nebraska, Utah, Montana and Minnesota.

Meanwhile, the property & casualty insurance industry recorded $11.5 billion in net underwriting profit in the first half of 2025, which is nearly triple the $3.8 billion earned in the same period of 2024. Earnings came despite a slate of catastrophic events early in the year.

Will Jones is IA editor-in-chief.