Drivers switching car insurance at increasing rates, study finds
A J.D. Power and TransUnion study showed that consumers are finding better alternatives when shopping for car insurance
Drivers are increasingly switching their auto insurance, according to a new study. Here's what they're looking for. (iStock)
Drivers on the hunt for new car insurance are switching companies at increasing rates, according to a new study from J.D. Power and TransUnion.
The number of drivers shopping for new insurance has remained relatively steady, with 11.4% of consumers obtaining new insurance quotes in the fourth quarter of 2021, the study showed. But the rate that drivers are switching providers is up, rising from 3.3% in the fourth quarter of 2020 to 3.5% in the fourth quarter of 2021. At the beginning of last year, the switch rate had dropped as low as 3.2%.
"If rates follow inflation and continue to head higher, consumers in all credit tiers will likely seek more value through the personalization of their auto risk programs," the study stated. "As more verifiable data like odometer-based mileage reporting and telematic-based driver behavior scoring become widely embedded in shaping auto premiums, usage-based programs will increase in importance."
If you are interested in switching your car insurance, you can potentially save money by comparing companies to see what other rates are available. Visit Credible to find your personalized rate without affecting your credit score.
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High-risk drivers most likely to shop for new insurance
During 2020, higher-risk drivers were less likely to shop for new auto insurance than lower-risk drivers. However, that trend reversed during the spring of 2021. This change could be due, in part, to the increased usage of telematics options, according to Michelle Jackson, TransUnion director of personal lines market strategy. Telematics allow insurance companies to collect information about mileage and driving habits
"Lowering premium costs remained the primary motivation for auto insurance shopping," Jackson said. "In addition, 2021 saw an increase in telematics adoption, with 49% of consumers opting into a program when presented a telematics option, according to a TransUnion survey.
"With insurance rates decreasing or staying the same for nearly three-quarters of those that enrolled, telematics programs may present an alternative option to pursue lower insurance costs," Jackson said.
Switching auto insurance coverage could potentially help you save on your monthly payment. If you’re interested in changing your plan, you can visit Credible to compare multiple providers at once and choose the one with the best car insurance quotes for you.
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Consumers want personalized auto insurance
Drivers were more likely to search for new car insurance providers when they were looking for more value and personalization, the study showed. As prices increased over the past year, more consumers began looking to alternative programs beyond the traditional time-based insurance.
"More price sensitive customers are switching to usage-based insurance programs, but all tiers are now aware of and switching to more personalized value programs," the study stated.
If you want to switch your car insurance, contact Credible to speak to an auto insurance expert and get all of your questions answered.
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