J.D. Power: Auto insurance shopping decreases but consumers continue to switch

Auto insurance shopping is starting to cool off after hitting an all-time high last quarter, according to a new report from J.D. Power. 

Thirteen percent of consumers shopped for new insurance during the second quarter, a 1.1% decrease from last quarter and a 0.3% increase year over year. 

While shopping was down, more consumers (4.2%) switched insurance. This is 0.1% higher than last quarter and 0.3% higher than this time last year. 

According to the report, the average amount of premium moving carriers is more than $4,700. 

NJM, Country Financial, Erie, USAA and The Hanover had the highest customer loyalty in Q2. Insurance companies with the lowest loyalty include National General, Root, Liberty Mutual, Safeco and CSAA. 

Overall, shopping activity has increased for both auto and property above the previous year by 10% to 5%, the report says. It adds that higher-risk consumers, those with lower credit-based insurance scores, are more actively shopping for both auto and property insurance. 

The report says this is an indication that carriers have returned to traditional rate approaches where the greatest premium increases skew to riskier policies. 

The northeast saw the highest shopping activity, the report says. It adds that this is likely because of double-digit rate increases in the prior year for the region. 

“As auto insurance rate taking has stabilized and shopping has cooled off, a trend is emerging of the once stable bundled customer increasing their shopping activity, particularly when compared to their unbundled counterparts,” the report says. “This could be due, in part, to the fact that although auto rate increases have leveled off, homeowners’ rate increases have continued, likely leading to bundlers looking for better alternatives to reduce their premiums.”

Unbundled customer switching activity has flattened over the past five quarters, the report says. Yet, bundled customers saw a spike that has remained consistently high during that period. 

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Feature photo courtesy of glegorly/iStock. Embedded graphics courtesy of J.D. Power.