Higher auto premiums result in drivers buying less-than-desired coverage levels
Although drivers felt pressure from higher premiums, a majority of consumers didn’t shop around for lower rates in 2022.
Around 25% of American drivers said higher auto insurance premiums moved them to buy less coverage than they wanted in 2022, according to a survey of policyholders by Jerry Insurance Agency LLC, which noted no car-related expense grew more than insurance during the past decade.
Half of Gen Z and 31% of millennial policyholders surveyed reported sacrificing coverage in an effort to get a lower auto insurance payment during the past year. In 2022, auto insurance premiums increased 9%, according to Insurify, which projects that rates will increase another 7% in 2023.
Although drivers felt financial strain from higher insurance premiums, most didn’t shop around for lower rates, as Jerry reported 63% of American drivers didn’t comparison shop during 2022. Younger generations were more likely to shop around for lower rates, while a majority of baby boomers and Gen X drivers have had the same policy for more than five years, Jerry reported.
According to Henry Hoenig, a data journalist with Jerry, the disruptions seen in vehicle inventories and the impact on replacement costs are likely to continue in the near term.
“Supply-chain problems that have hit vehicle production are not fully resolved and the supply of newer used vehicles likely won’t return to normal until at least 2025,” Hoenig said in a release. “This means used-car prices will probably remain elevated, even if they fall somewhat from the recent highs.”
Roads are more dangerous post-COVID
The survey also found that 31% of drivers think driving has become more dangerous since the pandemic. Around 1 in 5 drivers said they saw one vehicle chase another during the past year, while 17% saw a driver leave their vehicle to confront someone and 4% witnessed someone firing a gun during a road rage incident.
The most common behaviors seen during road rage incidents were angry gesturing and yelling and aggressive honking. Around 30% of drivers said they didn’t witness any road rage during the past year, Jerry reported.
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