New research reveals Seven out of 10
homeowners rely on insurers for coverage guidance, highlighting
opportunities for carriers to leverage emerging technologies to
meet consumer needs.
ATLANTA, Sept. 26,
2024 /PRNewswire/ -- Today,
LexisNexis® Risk Solutions announced its U.S. Home
Insurance Consumer Insights report, a new study that reveals a gap
between homeowners' understanding of their insurance coverage, the
actual risks their properties face and their willingness to provide
data to help ensure proper coverage. The consumer study highlights
homeowners' reliance on insurance carriers or agents to help ensure
they have adequate coverage while also identifying two distinct
cohorts of policyholders: those with a "Set It & Forget It"
mindset or those who are "Insurance Involved."
By gaining a deeper understanding of each group's motivations to
develop more effective engagement strategies and by leveraging
emerging technologies to better assist with risk assessment, home
insurers can bridge these gaps with consumers and address
profitability challenges faced by the industry.
Key takeaways
- Homeowners value insurance and are willing to pay more:
72% of homeowners are willing to pay higher premiums to help ensure
they are fully covered.
- Renewals drive shopping behavior: One-third of
homeowners shop for home insurance regularly and most often at
renewal. If they do not shop regularly, price and competitive
offers can move consumers to act.
- Two distinct consumer segments emerged, Set It & Forget
It and Insurance Involved: Homeowners with the Set It
& Forget It mindset (47%) are less engaged with their policies.
In contrast, Insurance Involved homeowners (37%) are more engaged
but can drive higher operational costs for carriers.
- Over half of respondents (59%) are highly concerned about
using their home insurance but only half (51%) know the
specific details of their policy and the coverage. Industry
analysis suggests many may be underinsured[1].
- Nearly eight out of 10 homeowners assume some or all
responsibility for collecting or providing information about
their home at application and renewal, however 70% of homeowners
rely on a carrier or agent to make sure they have the right type
and amount of coverage.
- Emerging technologies like consumer-led methods for visual
home inspections using a mobile device can bridge the gap
between consumer knowledge and insurer profitability: 61% of
homeowners believe assessing risk through their actual home's
condition via a consumer-led inspection is a fair and accurate way
to determine insurance rates—almost double the number who find it
acceptable to use similar homes, such as neighbors' properties, to
compare risk.
"Our new home insurance research underscores a growing
expectation among homeowners for insurers to help provide adequate
coverage while also helping these insureds address their own
knowledge gaps about their homes' potential risks," said
Cole Winans, vice president and
general manager, home insurance, LexisNexis Risk Solutions.
"Insurance carriers have an opportunity to proactively engage with
homeowners, especially those with the Set It & Forget It
mentality, to ensure they are adequately covered and informed of
the ever-evolving risks that are present in the home insurance
market. It is becoming more necessary than ever for carriers to
adopt a consultative mindset with consumers who might be looking to
shop based simply on higher premiums. Our research indicates that
consumers in both cohorts studied are often willing to pay more to
cover unforeseen risks."
Opposing Mindsets Require Tailored
Approaches
Set It & Forget It homeowners
self-identify as being less knowledgeable about policy specifics,
which can result in homeowners being surprised when additional
hidden risks are uncovered, particularly at renewal. Conversely,
Insurance Involved homeowners say they are more proactive, often
engaging with separate home and auto insurance providers and having
a better understanding of their policy.
Carriers that understand the different attitudes and behaviors
of these two customer segments can better address the challenges
related to their unique needs such as:
- Homeowners with the Insurance Involved mindset feel more
knowledgeable about insurance; however, increased engagement can
lead to higher service costs for carriers, which they will need to
address operationally.
- Homeowners with the Set it & Forget It mindset are
more distanced from their home insurance. Fewer than half of
homeowners are highly concerned with needing to use home insurance
(48%) and a little over a third know the specifics of their policy
and coverage (37%).
- Of respondents representing both segments, 61% always feel home
insurance is worth the money they pay and 59% are highly concerned
about having a situation where they would need to use their home
insurance.
The Disconnect Between Coverage and
Awareness
The report also underscores a fundamental
disconnect that while most homeowners assume they have sufficient
coverage, their actual understanding of policy details and
potential risks remains limited. Homeowners who rely more on their
carriers or agents for information tend to be less aware of
property risks, with only 31% considering themselves as highly
informed. Despite the perception of insurance value, 53% of all
respondents believe they have coverage for minor and major events,
while 47% believe they only have coverage for major events. Only
51% know the specific details of their policy and coverage.
Industry analysis suggests many may be underinsured.
Meeting Homeowners' Expectations and Carrier Needs through
Emerging Technologies
Homeowners (70%) are interested
in better understanding risks to their home, and nearly eight out
of 10 assume some or all responsibility for collecting or providing
information about their home. Consumer-led mobile inspections –
allowing homeowners to document their property's condition via
mobile devices, capturing photos or videos of the interior and
exterior – offer an efficient alternative for carriers looking to
improve risk assessments while enhancing policyholder
engagement.
"Mobile inspections represent an ideal solution for both Set it
& Forget It and Insurance Involved homeowner segments," said
George Hosfield, associate vice
president, home insurance, LexisNexis Risk Solutions. "For the less
engaged Set It & Forget It homeowners, mobile inspections can
help reveal hidden risks and ensure coverage accuracy, and
Insurance Involved homeowners, appreciate the efficient, digital
interaction. This technology can not only elevate the customer
experience but also helps carriers reduce operational costs and
improve risk assessments."
According to the study, home insurance carriers offering mobile
inspections are perceived as:
- Innovative and forward-thinking by 69% of
homeowners
- Customer-focused by 62% of respondents
- Proactive in ensuring adequate coverage, as noted by 67%
of respondents
The research found that 71% of homeowner respondents were aware
of consumer-led mobile inspections and favor this method over
traditional in-person inspection visits. This complements the fact
that 61% of homeowners in the study believe assessing risk through
their actual home's condition via a consumer-led inspection is a
fair and accurate way to determine insurance rates. This is almost
double the number who find it acceptable to only use information
from similar homes, such as neighbors' properties, to compare
risk.
By adopting consumer-led mobile inspections, home insurance
carriers may:
- Improve risk assessments for the 47% of less-engaged, Set It
& Forget It homeowners
- Reduce service costs for the 37% of Insurance Involved
policyholders by deflecting service from more expensive, manual
channels
- Maintain customer satisfaction for the 63% of homeowners who
review their policies at renewal, ensuring they have adequate
coverage even after unreported changes to their homes
"As consumers continue to look for cost savings in this
challenging economic climate, they are increasingly looking to
lower their insurance expenses. Home premiums have risen, and this
is certainly contributing to the increased insurance shopping we
have seen in recent months," continued Hosfield. "Our research
shows that many are looking for key guidance from their insurers on
how to effectively cover their property and how to best mitigate
potential risks at their home. This presents a real opportunity for
insurers to offer counsel and to build continued trust with
customers.
Download the 2024 Home Insurance Consumer Insights
Study.
About LexisNexis Risk Solutions
LexisNexis® Risk Solutions harnesses the power of
data, sophisticated analytics platforms and technology solutions to
provide insights that help businesses across multiple industries
and governmental entities reduce risk and improve decisions to
benefit people around the globe. Headquartered in metro
Atlanta, Georgia, we have offices
throughout the world and are part of RELX (LSE: REL/NYSE: RELX), a
global provider of information-based analytics and decision tools
for professional and business customers. For more information,
please visit LexisNexis Risk Solutions and RELX.
Media Contact:
Chas Strong
Director, Communications
Global Insurance
LexisNexis Risk Solutions
706.714.8261 Mobile
charles.strong@lexisnexisrisk.com
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1 American
Property Casualty Insurance Association 2022, "Majority of insured
homeowners at risk of being underinsured amid high inflation &
increased building costs," infographic. Accessed June 20, 2024.
https://www.apci.org/attachment/static/6323/
|
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SOURCE LexisNexis Risk Solutions