Auto insurance shopping — and switching — is on the rise

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Drivers are not only looking for car insurance more than ever, they are also switching carriers.

According to a quarterly report from JD Power, in conjunction with TransUnion, the fourth-quarter 2022 auto insurance quote rate was 12.1% and the switching rate was 4.1% — both of which are highs in JD Power’s more than two years of quarterly reporting. loyalty indicators and shopping trends (LIST) report.

JD Powers noted that insurers have also cut spending on advertising, in some cases “closing acquisition channels to slow the growth of new, unprofitable businesses.”

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Source: JD Power Loyalty Indicator and Shopping Trends (LIST)

“As we see, consumers are shopping more than they were in the past, entering a market that is more difficult to navigate and finding carriers not as interested in getting their business in,” said JD Power. “How this plays out in 2023, we’ll be watching throughout the year.”

While consumers are looking for lower rates for a higher clip, telematics adoption has leveled off, according to the report. Most consumers who signed up for a telematics program were satisfied, but more than 40% said their rates had actually increased.

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“The value proposition of telematics is that consumers give up a sense of privacy or autonomy to provide insurers with proven safe driving in real time,” said Michelle Jackson, senior director of Personal Lines Market Strategy at TransUnion. “If they don’t see that translate into lower rates, or if their rates actually increase, some may not continue with the program.”

Usage-based insurance is becoming increasingly important. Increases in auto insurance rates have affected the bundling of home and auto insurance, JD Power suggested last year.

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Related: Rising Auto Rates Affecting ‘Bundle’ Strategy: JD Power

Among the top insurers, consumer loyalty was strongest for USAA, MAPFRE and New Jersey Manufacturers (NJM). It was lowest for National General, The Hanover and Progressive, according to the report.

Source: JD Power Loyalty Indicator and Shopping Trends (LIST)

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