LexisNexis Risk Solutions Releases New Study on U.S. Homeowner Insurance Preferences and Behaviors

New research shows that seven in 10 homeowners rely on insurers for coverage advice, highlighting opportunities for insurers to leverage new technology to meet consumers' needs.

ATLANTA, September 26, 2024 /PRNewswire/ — Today, LexisNexis^® Risk Solutions announced its US Home Insurance Consumer Insights report, a new study that identifies a gap between homeowners' understanding of their insurance coverage, the actual risks their properties face, and their willingness to provide data to ensure proper insurance coverage To ensure insurance coverage. The consumer study highlights homeowners' reliance on insurance carriers or agents to ensure they have adequate coverage, while identifying two distinct cohorts of policyholders: those with a “set it and forget it” mentality and those who ” “involved in the insurance.”

By deeper understanding the motivations of each group to develop more effective engagement strategies and using new technologies to better assist with risk assessment, home insurers can close these gaps with consumers and address the profitability challenges facing the industry.

Key insights

Homeowners value insurance and are willing to pay more: 72% of homeowners are willing to pay higher premiums to ensure they are fully covered.
Renewals increase purchasing behavior: A third of homeowners take out household contents insurance regularly and most often when renewing their insurance. If they don't shop regularly, prices and competitive offers can persuade consumers to take action.
Two distinct consumer segments emerged: “Set It” and “Forget It.” And Insurance involved: Homeowners with a “Set It & Forget It” mindset (47%) are less concerned with their policies. In contrast, homeowners who participate in insurance (37%) are more engaged but may incur higher operating costs for carriers.
Over half of respondents (59%) are very concerned about purchasing their home insurance but only half (51%) know the specific details of their policy and coverage. Industry analysis suggests that many may be underinsured(1).
Almost eight out of ten Homeowners assume some or all of the responsibility for collecting or providing information When applying and renewing, they research their home, but 70% of homeowners rely on a carrier or broker to ensure they have the right type and amount of coverage.
New technologies such as consumer-oriented methods for visual home Inspections using a mobile device can bridge the gap between consumer knowledge and insurer profitability: 61% of homeowners believe that assessing risk based on the actual condition of their home through a consumer-led inspection is a fair and accurate way to determine insurance premiums – nearly twice as many as those who find it acceptable for similar homes , for example the neighbors' houses, to be used for comparison risk.

“Our new home insurance study highlights homeowners’ growing expectation of insurers to help them provide adequate coverage while helping those insureds fill their own knowledge gaps about their home’s potential risks,” he said Cole WinansVice President and General Manager, Home Insurance, LexisNexis Risk Solutions. “Insurance carriers have an opportunity to proactively work with homeowners, particularly those with a “set it and forget it” mentality, to ensure they are adequately covered and informed about the ever-evolving risks in the home insurance market. There are more and more “It is more necessary than ever for carriers to take a consultative stance toward consumers who may want to purchase based solely on higher premiums. Our research shows that consumers in both cohorts studied are often willing to pay more to cover unforeseen risks.”

Opposing ways of thinking require tailored approaches
“Set It & Forget It” Homeowners describe themselves as less knowledgeable about the details of the policy, which can lead to homeowners being surprised when additional hidden risks are uncovered, particularly at renewal. In contrast, homeowners who deal with insurance say they are more proactive, often working with separate home and auto insurance providers and better understanding their policies.

Carriers that understand the different attitudes and behaviors of these two customer segments can better address the challenges related to their individual needs, such as:

Homeowners with an “insurance-involved” mindset feel more informed about insurance; However, increased engagement may result in higher service costs for network operators to manage operationally.
Homeowners with a “set it & forget it” mentality are more distant from their home insurance. Less than half of homeowners are very concerned about having to purchase home insurance (48%), and just over a third know the details of their policy and coverage (37%).
Of respondents representing both segments, 61% always believe that home insurance is worth the money they pay and 59% are very concerned that they might find themselves in a situation where they lose their home insurance would have to claim.

The discrepancy between coverage and awareness
The report also highlights the fundamental disconnect that while most homeowners believe they have adequate coverage, their actual understanding of insurance details and potential risks remains limited. Homeowners who rely more heavily on their conveyancers or agents for information tend to be less aware of real estate risks. Only 31% consider themselves well informed. Despite perceptions of insurance value, 53% of all respondents believe they are insured for both minor and major events, while 47% believe they are only insured for major events. Only 51% know the specific details of their policy and coverage. Industry analysis suggests that many may be underinsured.

Meeting homeowner expectations and operator needs through new technologies
Homeowners (70%) are interested in better understanding the risks to their home, and nearly eight in ten take some or full responsibility for collecting or providing information about their home. Consumer-led mobile inspections – which allow homeowners to document the condition of their property via mobile devices and take photos or videos of the interior and exterior – offer an efficient alternative for carriers looking to improve risk assessment while strengthening policyholder engagement.

“Mobile inspections provide an ideal solution for the Set It & Forget It and Insurance Participant segments of homeowners,” he said George HosfieldAssistant Vice President, Home Insurance, LexisNexis Risk Solutions. “For the less engaged Set It & Forget It homeowners, mobile inspections can help uncover hidden risks and ensure coverage accuracy, and homeowners involved in insurance value the efficient, digital interaction. This technology can not only improve the customer experience, but also help carriers save costs, reduce operating costs and improve risk assessments.”

According to the study, home insurance carriers that offer mobile inspections are perceived as:

Innovative and future-oriented by 69% of homeowners
Customer focused by 62% of respondents
Proactive in ensuring adequate coverage, as stated by 67% of respondents

The research found that 71% of homeowners surveyed were aware of mobile consumer inspections and prefer this method over traditional on-site inspection visits. This complements the fact that 61% of homeowners in the study believe that assessing risk based on the actual condition of their home through a consumer-led inspection is a fair and accurate method of determining insurance premiums. This is almost twice as many as the number of people who think it is acceptable to only use information from similar houses, such as neighboring properties, to compare risks.

By introducing mobile consumer inspections, home insurance carriers can:

Improve risk assessments for 47% of less engaged homeowners use it and forget about it
Reduce service costs for the 37% of Insurance Involved policyholders by diverting service away from more expensive, manual channels
Ensure customer satisfaction 63% of homeowners review their policies when renewingto ensure that they have adequate insurance coverage even after unreported changes to their homes

“As consumers continue to look for cost savings in this difficult economic environment, they are increasingly looking to reduce their insurance costs. Home premiums have increased and this is certainly contributing to the increased insurance purchasing we have seen in recent months,” Hosfield continued. “Our research shows that many are looking to their insurers for important advice on how to effectively protect their property and best mitigate potential risks in their home. This represents a real opportunity for insurers to offer advice and build ongoing trust with customers.”

Download the 2024 Consumer Insights Home Insurance Study.

About LexisNexis Risk Solutions
LexisNexis^® Risk Solutions leverages the power of data, advanced analytics platforms and technology solutions to deliver insights that help companies across industries and government agencies reduce risk and improve decisions to benefit people around the world. Headquarters in Metro Atlanta, GeorgiaWe have offices around the world and are part of RELX (LSE: REL/NYSE: RELX), a global provider of information-based analysis and decision-making tools for professional and business customers. For more information, visit LexisNexis Risk Solutions and RELX.

Media contact:
Chas Strong
Director, Communications
Global insurance
LexisNexis Risk Solutions
706.714.8261 Cell
(email protected)

¹ American Property Casualty Insurance Association 2022: “The majority of insured homeowners are at risk of being underinsured amid high inflation and increased construction costs,” infographic. Accessed June 20, 2024. https://www.apci.org/attachment/static/6323/

SOURCE LexisNexis Risk Solutions