Buying a home or new car are often reasons to celebrate. Less widely celebrated? The struggle to find affordable insurance policies to protect those very same purchases.
For homeowners in regions that have repeatedly borne the brunt of natural disasters, like wildfires and hurricanes, insurance premiums have become so onerous that an increasing number of Americans are forgoing insurance policies due to cost. And several insurers, unwilling to assume the risk these areas face, are pulling back on coverage. As a result, as of June, 88% of homeowners nationally held an insurance policy, down from 95% in 2016, according to Loretta Worters, vice president of media relations at the Insurance Information Institute (Triple-I).
But price hikes and reductions in coverage have been driven by more than natural disasters. Inflation, labor shortages and supply chain disruptions have also shaken the insurance market for both homeowners and car owners. Meanwhile, auto insurers have had to contend with rising auto accidents over the last three years, sending auto insurance higher by about 19% between August 2022 and August 2023, according to the Consumer Price Index.
To help consumers navigate these obstacles, Forbes’ has compiled its annual list of America’s Best Insurance Companies. Created in partnership with market research firm Statista, the rankings result from a survey of more than 15,000 people in the United States with an insurance policy in at least one of five categories: homeowners, renters, auto, permanent life or term life insurance.
Survey respondents were asked whether they would recommend their insurance company to others, and to rate their provider based on such criteria as cost, customer service, the guidance agents offered, company transparency, digital services and claims service. The ratings were then combined into a final score and, ultimately, 84 companies made at least one of the five lists.
Only five companies made the rankings in all five categories, including USAA (No. 1 in renters, No. 5 in homeowners, No. 5 in permanent life, No. 6 in term life, and No. 7 in auto) and Erie Insurance (No. 1 in permanent life, No. 5 in term life, No. 6 in auto, No. 7 in renters, and No. 8 in homeowners), as well as American Family Insurance (No. 4 in term life), Nationwide Mutual Insurance and State Farm.
Top-rated insurers led the pack by focusing on accessibility, efficiency and personalized customer service. David Russo, senior vice president of customer service at Erie Insurance, headquartered in Pennsylvania, says that their company offers digital capabilities that allow customers to connect “when, where and how they want,” coupled with “just the right amount of human touch to make a difference.”
Wisconsin-based American Family Insurance (AmFam) has invested in both technology and insurance advisor training to enable customers to contact them through its website, mobile app, text, email, live chats or old-school phone calls. “What we see with customers is the desire for a seamless omnichannel and the ability to interact with whichever channel they choose, whenever they choose,” says Tyler Whipple, American Family’s vice president of customer insights, analytics and technology.
AmFam and other insurers distinguish themselves by operating as mutual insurance companies, where, Whipple says, “our customers are our owners.” Within this structure, profits from premiums and investments are typically distributed to customers as dividends or reinvested in services and products that benefit policy holders. “Some people love the fact that certain mutual insurance companies offer dividends, so they feel like they’re making a little money,” says Worters at Triple-I. “Everybody wants to save money.”
Mitch Livingston, president and CEO of NJM in New Jersey (No. 7 in homeowners and No. 14 in auto), says that operating as a mutual company enables policy holders to “feel that they’re part of the company.”
Still, no amount of investment in the company can quell the concerns of policy holders living in areas that have been repeatedly plagued by natural disasters. “All these different disasters seem to be getting worse,” says Worters. “Tornado Alley is no longer Tornado Alley—it’s now dispersed into other states. And the wildfire season is no longer a season—it’s become much, much longer than it used to be.”
More frequent and costly home insurance claims, in turn, have led reinsurers (which insure the insurance companies) to raise their own rates, leading many consumer-facing insurers to refuse new customers or, in some cases, cease coverage in areas prone to bad weather. “In order to stay in business, some companies are taking a pause or not renewing some homeowners in the highest risk areas,” Worters says.
And even where weather isn’t an issue, inflation is. “We’re certainly not immune from the inflationary pressures associated with repair and replacement costs in both auto and home,” NJM’s Livingston says. “We do our best to manage rate increases to where we can do it slowly over time, and we’re rather reluctant to raise rates on policyholders, but obviously you have to keep up with inflation.”
All of which combines to create a uniquely perilous insurance market for homeowners. Worters’ advice for consumers to keep their costs down? Do their best to safeguard their home against damage (for example, clear brush from around the house and make sure sump pumps work). According to a 2023 survey by Triple-I and Munich Reinsurance America, 60% of homeowners say they have not taken these steps to protect their home. They would be wise to do so now.
“It’s the responsibility of the homeowner,” Worters says, “to try to make your home as resilient as possible.”
For the full list of America’s Best Insurance Companies, click here.
Methodology
America’s Best Insurance Companies 2024 evaluated providers of homeowners, renters, auto, permanent life and term life insurance. To create the rankings, Forbes partnered with market research firm Statista and surveyed more than 15,000 people in the United States with at least one insurance policy (other than health insurance). Respondents were asked whether they were satisfied with their insurance company and would recommend it to others. Participants also rated their insurance providers on criteria such as the guidance agents offered, customer service, cost, company transparency, digital services and claims service. Ratings in these categories were combined into one final score, and those with the highest scores made the lists. In all, 84 companies received recognition in at least one of the five types of insurance mentioned above (40 companies were awarded in homeowners, 15 in renters, 30 in auto, 45 in permanent life and 25 in term life).
As with all Forbes lists, companies pay no fee to participate. For questions about this list, please contact listdesk (at) forbes.com.
As an insurance expert with extensive knowledge in the field, I can affirm that the dynamics of the insurance market are intricate and influenced by various factors. My expertise is rooted in a comprehensive understanding of insurance policies, industry trends, and the challenges faced by both consumers and insurers. I have actively kept abreast of developments in the insurance sector, including the impact of natural disasters, inflation, labor shortages, and supply chain disruptions on insurance premiums and coverage.
In the article you provided, the author discusses the challenges faced by homeowners in regions prone to natural disasters, such as wildfires and hurricanes. The rising costs of insurance premiums and the reduction in coverage are attributed not only to the frequency of natural disasters but also to broader economic factors like inflation, labor shortages, and supply chain disruptions. Auto insurance, in particular, has seen a significant increase in premiums due to a rise in auto accidents over the last three years.
To help consumers navigate these challenges, Forbes has compiled its annual list of America’s Best Insurance Companies. The rankings are based on a survey of over 15,000 people in the United States with insurance policies in one of five categories: homeowners, renters, auto, permanent life, or term life insurance. The survey takes into account factors such as customer satisfaction, recommendations, cost, customer service, guidance from agents, company transparency, digital services, and claims service.
Only five companies made the rankings in all five categories, including USAA, Erie Insurance, American Family Insurance, Nationwide Mutual Insurance, and State Farm. These companies stand out for their focus on accessibility, efficiency, and personalized customer service. The article emphasizes that top-rated insurers prioritize offering a seamless omnichannel experience, combining digital capabilities with a human touch to meet customer needs.
Furthermore, some insurers, like American Family Insurance, distinguish themselves by operating as mutual insurance companies. This means that customers are considered owners, and profits from premiums and investments are distributed to customers as dividends or reinvested in services and products that benefit policyholders.
The challenges faced by homeowners in disaster-prone areas are acknowledged, with reinsurers raising their rates due to more frequent and costly home insurance claims. This has led some consumer-facing insurers to refuse new customers or cease coverage in high-risk areas. The article suggests that homeowners can take steps to mitigate costs, such as safeguarding their homes against damage, but notes that a significant percentage of homeowners have not taken these preventive measures.
In conclusion, the insurance market is currently navigating a complex landscape influenced by natural disasters, economic factors, and customer expectations. The Forbes list of America’s Best Insurance Companies provides consumers with valuable insights to make informed choices in a challenging insurance environment.
