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Half of Auto Insurance Consumers Are Shopping for New Policies

The increase in auto insurance shopping is prompted by soaring auto insurance costs, with a 22.2% year-over-year increase in the average cost of auto insurance through the end of February.
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half of auto insurance consumers are shopping for new policies

Nearly half (49%) of U.S. auto insurance customers say they have actively shopped for a new policy within the past year, according to the J.D. Power “2024 U.S. Insurance Shopping Study." Of those, 29% have switched carriers, with the highest rates of switching among Generation Z consumers.

The increase in shopping is prompted by soaring auto insurance costs—with a 22.2% year-over-year increase in the average cost of auto insurance through the end of February, more than any other type of household expense, according to the U.S. Bureau of Labor Statistics consumer price index summary—combined with less-than-stellar customer satisfaction scores, according to J.D. Power. The average overall satisfaction among auto insurance shoppers is 676 on a 1,000-point scale.

As prices have risen, carriers have also been pulling back on discount opportunities, with usage-based insurance (UBI) programs only offered to 15% of insurance shoppers this year, compared to 22% a year ago. And customers enrolling in UBI programs show just a 6-point increase in price satisfaction this year, a significant drop from the 32-point difference in 2023.

“After the past few years of steady auto insurance premium increases, customers are no longer passively keeping an eye out for a better deal," said Stephen Crewdson, senior director, insurance business intelligence at J.D. Power. “Instead, they are actively seeking new carriers to offset these rising costs. However, with rising premiums across the country and fewer insurers explicitly offering usage-based insurance—or UBI plans—during the quoting process, insurance shoppers are not finding many alternatives."

Electric vehicle (EV) owners are less satisfied with their auto insurance purchase experience than customers with gas-powered vehicles. Thanks to EVs being more expensive to insure and lower satisfaction with the EV quoting process, the average purchase experience satisfaction score among EV owners is 663, 16 points lower than gas vehicle owners. 

The study also found that more than 1 in 3 customers are interested in purchasing embedded insurance, which is auto insurance provided directly through the car dealer or manufacturer.

AnneMarie McPherson Spears is IA news editor. 

Thursday, June 13, 2024
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