New J.D. Power Survey Shows Consumers Changing Auto Insurance to Save Money — What Makes it a Smart Financial Move?

Car insurance working desk concept.
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The shift from commuting to work to working from home during the pandemic was an unexpected financial blessing for most, especially when gas prices were at their peak.

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For drivers, working from home meant saving time and money by avoiding lengthy commutes. With these becoming a daily reality again, more people are rethinking their car use and looking to save money.

Car insurance is a necessity for drivers, but once settled, many drivers remain loyal to their chosen insurance company — even if they aren’t getting the best deal. According to a recent J.D. Power report, more drivers are now shopping for better auto insurance rates (and switching insurance companies to save money).

In its Q2 2022 Quarterly Shopping List Report, J.D. Power claims that drivers are comparing quotes and are changing insurance more often, according to Fox Business. There has been an 11.8% increase in the rate at which drivers were given new auto insurance quotes as compared to 2021 Q2. Additionally, in the second quarter of 2022, customers switched insurance providers at an increased rate of 3.6% year-over-year.

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According to J.D Power’s Insurance Loyalty Indicator and Shopping Trends (LIST), Kemper, Progressive, ACG, National General and GEICO are the providers with the lowest levels of customer loyalty, while drivers who insure with Amica, USAA, Erie, NJM and MAPFRE are less likely to switch.

Simply put, having the option to switch insurance companies is a consumer-friendly practice which allows for more competitive pricing. It is always wise for insurance purchasers to seek the best deal possible, despite sentiments of company loyalty to any given insurer.

Pay-as-You-Go and Telematics-Based Car Insurance on the Rise

Pay-as-you-go insurance is also becoming more popular, as is telemetry, according to the study. By wirelessly tracking one’s driving patterns, telematics can monitor safe driving and provide a potentially better insurance premium rate.

“More consumers are warming to the idea of using a telematics tool to enhance safe driving, while also lowering costs,” said Michelle Jackson, TransUnion exec. TransUnion collaborated with J.D. Power on the Quarterly Shopping List Report. “Consumers are shopping for lower premiums, better coverage and superior service from their insurer,” Jackson added.

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According to TransUnion’s year-over-year trends, the number of customers offered a policy determined by telematics monitoring increased from 32% to 40% — and the number who accepted the surveillance-based rate method rose from 49% to 65%.

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“As consumers search for lower premiums they are increasingly turning to usage-based insurance (UBI) programs to help alleviate the increased mobility costs,” J.D. Power indicated in its report.

“Since LIST began tracking both shopping and overall usage of UBI, we’ve seen a steady increase in adoption, particularly by those in the lower self-reported credit tiers, a trend that is likely to continue as macroeconomic pressures continue to impact consumers — particularly those who are price-sensitive,” the report added.

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About the Author

David Nadelle is a freelance editor and writer based in Ottawa, Canada. After working in the energy industry for 18 years, he decided to change careers in 2016 and concentrate full-time on all aspects of writing. He recently completed a technical communication diploma and holds previous university degrees in journalism, sociology and criminology. David has covered a wide variety of financial and lifestyle topics for numerous publications and has experience copywriting for the retail industry.
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