Good washer supply hoses should last the life of the washing machine. However, the insurance company is speaking from a flood prevention perspective. Normally, a set of rubber supply hoses will last you many many years. However, if one of those hoses just happens to be rubbing against a piece of sharp metal behind the washing machine, the metal might cut into the hose deeply enough to cause the hose to rupture (when you're at work, say) so that you come home to a basement full of water.
The advantage of stainless steel hoses is that stainless steel is harder than the regular mild steel they make washing machine cabinets out of. So if a stainless steel washing machine hose is rubbing against a piece of sharp metal on the cabinet, it's that sharp metal that gets worn down, not the hose.
There are washing machine alarms on the market that detect a burst hose, but in my view, burst hoses are such a relatively rare occurance that simply replacing your hoses with stainless steel ones and shutting off the supply valves to your washer whenever you go on vacation or will be away from your house for an extended period of time should be sufficient to protect you from a flood.