Auto, homeowners insurance shopping curbed in Q2, TransUnion says

Consumers didn’t shop as much for homeowners and auto insurance in the second quarter of 2022 amid fewer home and auto sales, according to a recent TransUnion report.

Shopping for homeowners insurance only increased 4% in the second quarter compared to the same time last year, the report said. The increase was mostly driven by activity in southern states, where shopping was up 12% compared to last year.

And auto insurance dipped 3% in the second quarter compared to the same time last year. The biggest drop in auto insurance shopping was in the higher-risk consumer category, which TransUnion defined as shoppers with credit scores between 300 and 500. This category showed an 11% decline in shopping activity over the second quarter, compared to last year.

"One unusual storyline of 2022 is that there was a surge of insurance shopping in the beginning of the year among the highest-risk groups; however, these sales slumped quite rapidly as we moved into the second quarter of the year," the TransUnion report said. "It’s possible that some of this early-year shopping activity was driven by the wave of tax refunds."

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Car insurance shopping ebbs as purchases decline

New and used car sales recorded a drop of 3.7% and 17%, respectively, in May, according to TransUnion. And the used car market is currently on pace to finish the year with a more than 12% decrease in sales from the 40.6 million recorded in 2021, according to Cox Automotive.

The lower sales volumes largely explained why auto insurance shopping activity slowed in the second quarter, TransUnion said. With fewer auto purchases, consumers had less of a reason to shop for new insurance.

The bulk of auto insurance shopping activity in the second quarter was instead driven by those in search of cheaper rates, the report said. This trend is expected to drive shopping activity for the rest of 2022 as shoppers contend with increased insurance rates and high auto prices that impact sales volume. 

"Even with the influx of consumers shopping for their auto insurance as premiums increase from industry-wide rate increases, this cannot overcome the suppressed shopping rates we are seeing from consumers not purchasing new cars, thus creating a shopping event," Michelle Jackson, senior director of personal property and casualty insurance, in TransUnion’s insurance business, said.

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Potential rebound in homeowners insurance shopping possible, report says

On the homeowners insurance side, higher mortgage rates sidelined homebuyers and limited mortgage refinancing opportunities, creating fewer reasons for insurance shopping.

A recent report by ATTOM showed that lenders issued $807.8 billion worth of mortgages in the second quarter of 2022, and overall, 2.39 million mortgages were originated. That figure was down 40% from the second quarter of 2021. 

Homeowners insurance shopping in the second quarter was driven largely by migration activity to southern states, the TransUnion report said.

"We’re still seeing interest in relocating to sunnier environments, which has led to increased homeowners’ insurance shopping in states such as Florida and Texas, which ironically are states that are more prone to extreme weather events and more expensive insurance," Jackson said. "However, consumers in the housing market are increasingly facing headwinds from rising mortgage interest rates and housing costs, which has tempered the rate of purchases and refis, and consequently, insurance shopping."

However, there is some evidence that homebuyers may be returning to the market, creating more opportunity for insurance shopping activity. A recent TransUnion Consumer Pulse survey said that 32% of consumers plan to apply for a mortgage within the next year — a 4% increase from last year. Of the respondents, millennials led all generations with 40%.  

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