J.D. Power: Uptick in auto policy shopping continued in Q2
Policy switching in Q2 2023 remained flat from the previous quarter at 3.9%.
Rate adequacy continued to challenge auto insurers in the second quarter of 2023, according to J.D. Power’s Q2 2023 U.S. Auto Insurance Shopping LIST Report. As rates continue to increase in order to keep up with costs, more and more drivers are exploring their coverage options in an attempt to find more affordable premiums.
Rising insurance costs are even pushing some to allow their coverage to lapse. According to a recent survey from TransUnion, almost 15% of drivers admitted to owning or using a car without valid insurance at some point in the previous six months. Around 30% of those who had driven without coverage cited the inability to pay premiums as their main reason for doing it.
The quarterly auto insurance quote rate grew from 12.4% in Q1 2023 to 12.5% in Q2 – marking the highest shop rate J.D. Power has recorded in three years of daily tracking auto insurance shopping. The report explains auto insurance shopping has been historically seasonal, with the highest rates usually occurring around tax season in April when more folks are shopping for a new or replacement vehicle. However, this pattern has shifted in 2023.
The highest monthly shopping rate recorded in 2023 so far happened in March (13.1%), and policy shopping actually dropped in April to 12.6%. Shopping bounced back to 12.8% in May before dropping to 12.1% in June. The report theorizes the drop in shopping in June could be attributed to consumers showing signs of fatigue.
By region, shopping rates increased in the Northeast and Midwest, decreased in the West and remained steady in the South in Q2.
Despite fluctuations in the number of drivers shopping, policy switching in Q2 2023 remained flat from the previous quarter at 3.9%.