Best homeowners insurance picks for 2024

Best homeowners insurance picks for 2024

As we approach 2024, the homeowners insurance industry continues to evolve rapidly thanks to technological advancements, changing market conditions and environmental factors. We’re taking a look at the key trends shaping homeowners insurance in 2024 so you can find the best insurance policies that align with these developments.

AI is revolutionizing home insurance

In 2024, the home insurance industry will increasingly harness AI and big data to revolutionize policy personalization and risk management. Deloitte Center for Financial Services highlights this significant shift, indicating a move toward using more sophisticated data and AI tools to understand the risks both homeowners and insurers are facing.

“A wide range of data, from property records to crime statistics to previous claims, is available and can be used to price risks and personalize coverage,” said Betsy Stella, vice president of carrier management and operations at Insurify.

Similarly, insurers will adopt proactive strategies in loss prevention. Stella mentioned carriers will use AI in their predictive models and incentivize the use of smart technologies, like leak sensors and connected cameras, for better risk mitigation.

Some home insurers will even provide consumers with easy-to-use mobile apps in lieu of in-person inspections, noted Cole Winans, vice president and general manager of property solutions at LexisNexis Risk Solutions.

“These apps leverage machine learning technology to identify potential issues early so that the consumer can fix them before they result in a claim,” Winans said, pointing out that the apps could “a porch without a railing, corroding plumbing and recalled circuit breaker boxes.”

By handling these issues proactively, homeowners can reduce their likelihood of filing a claim.

Insurers will also lean on an increased usage of Internet of Things (IoT) technologies for real-time risk assessment, said David Stuart, president and founder at Southwestern Insurance Group. This is the technology used in wearable health monitors, smart home systems and usage-based and pay-per-mile car insurance programs.

By using smart devices to collect data and identify potential losses, insurers can provide homeowners with personalized recommendations to mitigate risks, ultimately reducing the frequency of claims and potentially lowering insurance premiums.

Rising premiums due to climate change

Homeowners in 2024 will grapple with rising insurance premiums, a trend directly linked to climate change. Deloitte Center for Financial Services notes that insurers are facing more frequent and severe weather events like wildfires and hurricanes, leading to increased claims and higher premiums. Some homeowners are already feeling the effects of this as various insurers pull out from selling coverage in their states because the risks are too high.

The undeniable impact of climate change on the insurance market will become more apparent in 2024, said Gregg Barrett, CEO of Waterstreet Company. “The rise in extreme weather events is leading to more claims, higher premiums and stricter underwriting,” Barrett said. This trend means homeowners need to be more vigilant in shopping for affordable policies.

Although policyholders are trying to navigate these industry-wide premium increases, carrying adequate coverage is becoming more important than ever, especially with climate change creating more potential for total losses and with continual issues impacting construction costs, labor and materials.

“With inflation and rising costs, homeowners should opt for a policy that covers the total rebuilding cost,” said Bob Hertel, director of product development – personal lines at Acuity Insurance. “Some insurers offer ‘extended replacement cost’ or even ‘guaranteed replacement cost’ endorsements to protect against unexpected expenses.”

Additionally, homeowners should plan for coverage gaps. “Policies typically exclude earthquake and flood coverage, but these can be added or purchased through the National Flood Insurance [Program],” Hertel said.

Steady market with modest home price growth

Most experts predict the 2024 housing market will feature steady sales and modest price increases when compared to these recent years of volatility. Both Realtor.com and Bright MLS foresee a market that grows gradually rather than experiencing sharp swings.

What does this mean for homeowners? A stable housing market translates to reliable home values. Drastic price drops or spikes will likely be replaced by small, manageable increases. This provides reassurance for both current owners and those looking to buy.

The housing market may also benefit from the slowing rental market: With an increase in rental options and a slight decrease in rent costs, many young families and couples will continue renting and saving for a first-home down payment. As a result, purchase prices will likely start to stabilize as competition rates more closely resemble inventory sizes.

Affordability challenges and limited home availability

Heading into 2024, the real estate market will continue to face significant affordability and availability issues, according to sources like Realtor.com and Bright MLS. While home listings will rise slightly due to increased construction rates, high prices and limited inventory in general will continue to hamper many buyers.

Those who own properties may opt to hold onto them given fewer, costlier alternatives. Finding an insurer that can offer competitive premiums and broad coverage options will be essential for current, as well as new, homeowners.

Best homeowners insurance for 2024

Now that we’ve explored the major trends shaping homeowners insurance in 2024, let’s take a closer look at some insurers projected to perform well based on key coverage features, customer ratings and pricing.

The following table compares the top-rated insurers from our 2023 study of the best homeowners insurance companies across criteria like average annual rates, extended replacement cost coverages, state availability and J.D. Power scores for overall customer satisfaction. This side-by-side comparison can help you determine which provider may be right for you as we enter the new year.

What next?

Making the effort to shop around for the best homeowners insurance in 2024 will give you peace of mind knowing your property is protected no matter what challenges arise in the future.

Not sure where to start? Get multiple customized quotes from companies like Chubb, American Family, State Farm, Nationwide, Auto-Owners and Progressive. Then, identify the policy that provides the right balance for your budget and coverage needs.