Trends in Auto Insurance Shopping and Quoting Reach New Heights
Between April and June of 2024, the national auto insurance shopping and quoting rate soared to new heights. However, according to a recent J.D. Power report, many insurers seem to have achieved or are approaching rate adequacy, which might lead to less rate activity and potentially reduced shopping in the future.
A Record-Breaking Period for Auto Insurance Shopping
The latest data from the consumer intelligence company J.D. Power reveals that May 2024 matched the ongoing study’s all-time high monthly shopping rate, initially set two months earlier, at 13.5% of U.S. drivers. Furthermore, 4.2% of drivers switched insurers in May, setting an all-time monthly high for the study, which dates back to September 2020.
“Rate filings showed a multi-decade high in February, and filings through the rest of 2024 show lower increases than those filed earlier in the year,” the report stated. This suggests that the surge in shopping for auto insurance may begin to moderate as rate increases stabilize.
Quarterly Insights: Shopping and Switching Trends
The national quarterly quote rate increased to 13.3% during the second quarter of 2024, marking the highest rate seen in the study’s nearly four-year history. In contrast, the national quarterly switch rate remained stable at 3.9%.
All regions of the country experienced double-digit quote rates during this period. The Southeast and South-Central United States led the way with 14.6% of drivers shopping for auto insurance. The West and Midwest followed with 13.2% rates, while 10.7% of drivers in the East shopped during the quarter.
Household Dynamics in Auto Insurance
J.D. Power’s report highlighted various household compositions with auto insurance. Two-car, two-driver homeowners represented 18.7% of these households last quarter. They were followed by homeowners with one car and one driver (9.1%), households with three or more cars and two drivers (8.1%), those with three or more cars and three or more drivers (8.1%), and one-car, two-driver households (5.7%). Additionally, one-car, one-driver renters accounted for 8.8% of households with auto insurance.
“Two years after we introduced the insurance neighborhood, we find the same six household types still dominate the landscape,” the report noted. “However, the propensity to shop and switch has changed dramatically. The unprecedented increase in rates has driven more households to shop and switch, particularly the more lucrative multi-vehicle, multi-driver households.”
Insurer Loyalty: Who’s Holding Steady and Who’s Losing Customers
The J.D. Power report identified NJM, Amica, USAA, MAPFRE, and Erie as “higher loyalty” insurers. On the other hand, National General, Kemper, Auto-Owners, ACSC, Mercury, and Progressive were categorized as lower loyalty companies. Notably, GEICO emerged as the top destination for those defecting from Allstate, Progressive, and State Farm.
Looking Ahead
As we progress through the remainder of 2024, it will be interesting to see how these trends evolve. With many insurers reaching rate adequacy, we might witness a stabilization in shopping and quoting rates. However, the dynamic landscape of auto insurance means that staying informed and adaptable will be crucial for both consumers and insurers.
For more insights and updates on the auto insurance market, stay tuned to our blog. Whether you’re looking to switch insurers or simply stay informed about the latest trends, we’re here to provide you with the information you need.