Drivers are once again shopping around for cheaper auto insurance rates, according to the latest Loyalty Indicator and Shopping Trends (LIST) report from J.D. Power and TransUnion. The shopping rate hit 13.5% in March 2024, the highest single month rate since September 2020.
What is driving the increase in auto insurance shopping?
The main factors behind the increased shopping are ongoing premium hikes by insurers and predictable seasonal patterns. Many insurers have been raising rates due to higher costs for vehicle repairs and more reckless driving. After taking a break from shopping in late 2023, consumers are back to looking for better deals in early 2024.
Which auto insurers are gaining and losing customers?
Progressive Insurance is the biggest winner when it comes to gaining customers who decide to switch auto insurers. Most of the other top carriers – including GEICO, State Farm, Allstate, Liberty Mutual, Travelers, and USAA – are most likely to lose customers to Progressive when they switch.
Why are customers switching auto insurers?
The most commonly cited reason for shopping around is “My rate was too high.” With vehicle repair costs rising due to more expensive car technology, insurers have been steadily increasing premiums to keep up. Many customers fail to take advantage of potential discounts, exacerbating the impact of rate hikes.
What does this mean for the auto insurance market?
According to Stephen Crewdson, Senior Director of Global Business Intelligence for Insurance at J.D. Power, “There’s been a great deal of upward pressure on auto insurance rates in recent years… Insurers are playing catch up, and there may be more rate increases in the future.“
He advises consumers not to be surprised by additional shopping interest and customers switching policies as a result. The largest jump in regional shopping was in the South, increasing from 13.2% in Q4 2023 to 14.4% in Q1 2024.
The bottom line is that as long as auto insurers continue raising rates to account for higher costs, price-sensitive consumers will keep shopping around for better deals. This creates opportunities for carriers like Progressive to gain market share, while pressuring others to find ways to retain customers in the face of stiff price competition.
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Source: Insurance Journal: Progressive Gains as Drivers Shop Around for Auto Insurance—Again