Drivers are switching car insurance at increasing rates, study finds

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Drivers are increasingly switching car insurance, according to a new study. Here is what they are looking for. (iStock)

Drivers looking for new car insurance are switching companies at an increasing rate, according to new study from JD Power and TransUnion.

The number of drivers buying new insurance has remained relatively stable, with 11.4% of consumers getting new insurance quotes in the fourth quarter of 2021, according to the study. But the rate at which drivers are switching providers is on the rise, from 3.3% in the fourth quarter of 2020 to 3.5% in the fourth quarter of 2021. At the start of last year, the rate of change had fallen to 3.2%.

“If rates keep pace with inflation and continue to climb, consumers of all credit levels are likely to seek more value from personalizing their auto risk programs,” the study said. “As more verifiable data such as odometer-based mileage reports and telematics driver behavior scoring become widely integrated into the development of automotive bonuses, usage-based programs will gain in importance.”

If you want to switch 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

In 2020, high-risk drivers were less likely to purchase new car insurance than low-risk drivers. However, that trend reversed in the spring of 2021. That shift may be due, in part, to the increased use of telematics options, according to Michelle Jackson, TransUnion’s director of personal lines market strategy. Telematics allows insurance companies to collect information on mileage and driving habits

“Reducing premium costs remained the primary driver for auto insurance purchases,” Jackson said. “Additionally, 2021 saw an increase in telematics adoption, with 49% of consumers opting into a program when presented with a telematics option, according to a TransUnion survey.

“With insurance rates decreasing or staying the same for nearly three-quarters of those who signed up, telematics programs may present an alternative option to reduce insurance costs,” Jackson said.

Switching car insurance coverage could help you save on your monthly payment. If you want to change your plan, you can visit Credible to compare several providers at once and choose the one that offers the best car insurance quotes for you.

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Consumers want personalized car insurance

The study showed that drivers were more likely to seek out new car insurance providers when they were looking for more value and personalization. As prices rose over the past year, more consumers began to look to alternative programs beyond traditional time-based insurance.

“More price-sensitive customers are switching to usage-based insurance programs, but all tiers are now aware and moving to more personalized value programs,” the study said.

If you want to change car insurance, contact Credible to speak to an auto insurance expert and get all your questions answered.

You have a financial question, but you don’t know who to contact? Email the Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.

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