Shopping for auto insurance slowed this year, but many Americans continue to look for new insurance in order to save money, rather than being prompted due to a new car purchase, according to new reports.
The auto insurance shopping rate dropped to 11.7% in the third quarter of 2022, down from 11.8% in the previous quarter, according to the Quarterly Auto Insurance LIST Report by J.D. Power in collaboration with TransUnion. And auto insurance shopping decreased 3% annually in the second quarter of 2022, according to the Personal Lines Insurance Trends and Perspectives Report by TransUnion.
"While auto insurance shopping is down overall, the percentage of shoppers seeking new auto insurance, but aren’t looking to buy a vehicle as well, has increased," the TransUnion report stated. "In other words, a higher percentage of shoppers are doing so driven by price or some other factor unrelated to a change in the car they drive."
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Auto insurance shopping slows in 2022
Auto insurance shopping is trending downward due to factors such as high car prices and low inventory as well as rising gas prices and interest rates, according to the J.D. Power and TransUnion report.
But even as more consumers seek to lower their insurance premiums, an 11% decrease in new auto insurance shopping by higher-risk consumers greatly subdued the total shopping overall, according to TransUnion’s report.
"The lack of new vehicle purchases suppressed overall auto insurance shopping," said Michelle Jackson, senior director of personal property and casualty insurance of TransUnion’s insurance business. "Even with the influx of consumers shopping 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."
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Homeowners insurance shopping rates vary by region
Homeowners insurance shopping was more resilient than auto insurance shopping during the second quarter of 2022, rising 4% annually, according to the J.D. Power and TransUnion study.
The slight increase in homeowner’s insurance shopping was primarily driven by an increase in the South. Homeowners insurance shopping in the region was up 12% year-over-year in the second quarter.
"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 in a press release.
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Inflation continues to impact the home and auto insurance industry
Nearly all Americans, or 95%, say inflation is a concern, and 38% say they’re extremely concerned, according to the latest Consumer Pulse Survey by TransUnion.
Experts expect inflation to remain high through 2024, saying the Fed may not reach its inflation target of 2% until that time, according to the latest forecast by the Mortgage Bankers Association (MBA). The Federal Reserve has recently attempted to lower inflation by raising interest rates, which could cause auto and home insurance premiums to rise in the coming months.
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