Marketing Mayhem, Rising Premiums Shining Light on Home Insurance Policies

“A talking gecko, a yellow hairball and a bundle of white aprons walk into a bar.”

Fortunately, no such joke exists — yet, anyway — but one could be excused for thinking the American home insurance scene of the mid-2020s begins and ends with such gimmicks.

Property and casualty insurance, as vital as it is to most Americans’ everyday lives, remains on the backburner for many, considered only in the aftermath of claim-inducing events such as floods or tornadoes.

That may be changing, however, as studies suggest younger adults are giving “grown-up” things like home insurance more consideration. Meanwhile, the COVID-19 lockdown forced homeowners to prioritize coverage as the home became office, gym and castle for many consumers.

Since insurance remains back of mind for most — at least when jingles can be suppressed — big national companies such as Progressive and Allstate must come up with mascots and detailed marketing campaigns to engage the public’s attention.

That is especially true for direct-to-consumer carriers such as Progressive that do not operate a network of agents with offices from Bangor to Bakersfield and points in between.

The gimmicks are working, though there is another motivating factor for many consumers.

Ryan Webb, a Shelter Insurance agent covering Conway and surrounding areas, has been in the business since 2003.

“I think the quick rise in the cost of insurance due to inflation is driving people to look at their policies,” he said.

According to a report from the National Association of Insurance Commissioners, average premiums for home insurance in the U.S. rose faster than inflation across all regions from 2018 to 2024. Premiums rose by an average of 10.4 percent in 2024 alone.

In Arkansas and other states where natural disasters are not uncommon, rates saw big hikes in 2023 and 2024. In Arkansas, it was 14.9 percent in 2023 and 12.4 percent in 2024.

In California, hit hard in recent years by severe wildfires, rates rose an average of 13.6 percent. Many national companies are pulling back on their coverage in the Golden State or pulling out all together.

An April 2025 report from the Consumer Federation of America found that U.S. homeowners spent $21 billion more on home insurance in 2024 than in 2021.

Multiple factors have contributed to this, according to Insurance.com. An uptick in severe weather and natural disasters; increased construction costs related to supply chain issues borne of the pandemic shutdown; increased litigation, especially in states where local laws favor consumers in suits against insurance companies; and stricter state regulations have all played a part.

Furthermore, a 2025 J.D. Power survey of U.S. consumers found that 49 percent of respondents reported a home-insurance rate increase over the past year, 43 percent switching companies specifically because of raised rates.

The top weather-related risks in the U.S., per Insurance.com, for each region of the country are:

• Southeast: hurricanes, flooding, tornadoes and wildfires

• Central: hail, tornadoes, winter weather and ice storms

• West: wildfires, flooding, earthquakes, tsunamis and landslides

• Northeast: ice storms, hurricanes, flooding and winter weather

Factors that could lead to continued rising rates include rate changes that have not reached consumers’ pocketbooks yet, the continued uptick in severe-weather events, the impact of tariffs and lingering supply chain issues.

Here in Arkansas, where homeowners must consider the prospects of fires, flooding, tornadoes and even earthquakes, Webb said consumers generally wind up with the right amount of coverage. Agents ensure clients are not underinsured, and consumers themselves are more aware of purchasing only the “coverage they need,” as the big boys so effectively communicate.

“Since COVID, everybody has really started looking at their policy,” Webb said. “Overinsured is not very common.”

Webb said many consumers tend to overlook things like deductibles and depreciating roof coverage if they have a claim. His office serviced one claim in which the homeowner was cutting down a tree on his own property, and the tree ended up falling onto the home.

As consumers adjust to the market, artificial intelligence is doing its part to impact the industry.

“Integrating AI into day-to-day operations is the big trend currently,” Webb said.

Insurance companies use AI for things like underwriting, customer service, claims handling, marketing, fraud detection and pricing. Webb said he does not foresee AI replacing people but rather continuing to support agents, actuaries, underwriters, customer service representatives and other industry professionals.

Evolved AI can help with things that were once not easy for computers, such as recognizing images, analyzing unstructured data and understanding different languages. AI can analyze data quickly to identify patterns, manage risk and support human decision-making, the NAIC blog states.

AI also helps insurers switch their approach from “detect and repair” — responding after a loss occurs — to “predict and prevent,” helping identify risks and enabling customers to take steps to avoid losses earlier, the blog reported.

It adds that large language models such as ChatGPT and Microsoft Copilot can answer customer questions and summarize documents but ultimately lack the ability to grasp context the way human beings can.

Dalia Ophir, director of business strategy for Microsoft Financial Services, wrote earlier this year that AI is slowly having a positive impact on the industry.

“For years, digital transformation has chipped away at pieces of the insurance value chain, but the industry has never fully realized the end-to-end improvement leaders have sought. That is changing,” she wrote.

“With advances in AI — especially intelligent agents and the automation patterns emerging from agentic design — insurers worldwide are recasting their most critical operations and offerings. From marketing and customer engagement through underwriting and claims processing, the industry is rapidly evolving, with AI as a central driver.”

She added that in the very near future, AI will likely be embraced to help bring about needed changes faster.

“Insurers can potentially realize transformative benefits with AI without needing to replace their core platforms but rather by augmenting and accelerating them through targeted, extensible, AI-powered capabilities,” she wrote. “Through advances such as intelligent agents and the automation patterns emerging from agentic design, insurers are consolidating fragmented workflows into connected, intelligent, adaptive systems.”