J.D. Power: Half of customers are shopping for new auto insurance

Increases in insurance premiums and "lackluster" customer satisfaction rates are leading customers to shop for new plans, according to J.D. Power's 2024 U.S. Insurance Shopping Study. 

The study, which is based on over 10,000 responses from insurance customers and was fielded from March 2023 to January 2024, finds that 49% of auto insurance customers are actively shopping for new policies. Of these customers, a reported 29% have switched carriers and Gen Z customers have the highest switch rates. 

"After the past few years of steady auto insurance premium increases, customers are no longer passively keeping an eye out for a better deal," said Stephen Crewdson, senior director, insurance business intelligence at J.D. Power, in a press release. "Instead, they are actively seeking new carriers to offset these rising costs. However, with rising premiums across the country and fewer insurers explicitly offering usage-based insurance—or UBI plans—during the quoting process, insurance shoppers are not finding many alternatives."

J.D. Power notes that insurers only offered usage-based insurance (UBI) programs to 15% of shoppers, which dropped from 22% in 2023. For the past few years, the industry has seen an increase in UBI program offerings. Such programs showed improved customer satisfaction in the past: in 2023, UBI offers increased customer satisfaction, whether the customer accepted or not. This year's study shows that customers who enrolled in UBI programs saw a six-point increase in satisfaction–a noticeable decrease from a 32-point difference in 2023.

"We see that shoppers are less likely this year than in recent years to mention the insurers they quoted proactively offered UBI. On the other hand, a larger share of shoppers signed up for UBI, perhaps meaning they expressed an interest in UBI before the insurer could make an offer," said Crowder, in an email to Digital Insurance. "While the offer of UBI still improves satisfaction, the lift is smaller than in previous years.  For many drivers, savings from UBI are surpassed by overall rate increases, which is likely what decreased the satisfaction impact of UBI offers this year."

Electric vehicle (EV) owners were less satisfied with their insurance purchasing experience than owners of traditional internal combustion engine vehicles. The study shares that the average purchase experience satisfaction score for EV owners is 16 points lower than gas-powered vehicle owners at 663 points out of a 1,000-point score. The difference between scores may be attributed to the quoting process of EVs, as they are typically more expensive to insure, according to J.D. Power. 

The study also notes the growing interest in embedded insurance offerings. Over a third, 35%, of auto insurance customers are interested in embedded insurance.