Record share of U.S. drivers shop for new auto insurance
Progressive, State Farm, Allstate and GEICO have been impacted.
Increasing rates and price sensitivity sent drivers looking for new auto insurance at a record pace during the first half of 2024, according to the latest report from J.D. Power.
The data shows the highest quarterly quote rates in the history of the study, reaching a new high of 13.3% over the second quarter of 2024, and after reaching a record 12.8% during the first quarter.
“The chief reason is inflation, both economic inflation and social inflation,” Senior Director of Business Insurance at J.D. Power, Stephen Crewdson, told PropertyCasualty360.
“Inflation impacts like increased vehicle prices, parts and labor have driven up the physical damage portion of premiums,” he said. “While social inflation has driven up the liability portion.”
Rate filings hit a multi-decade high in February, although filings through the rest of 2024 reflect lower increases than what were filed earlier in the year, the data showed. Meanwhile, shopping for auto insurance could moderate as rate increases calm, with many insurers appearing to achieve or approach rate adequacy.
“Companies with the largest shares of current customers leaving are Kemper, Liberty Mutual, and The Hanover,” Crewdson said.
“While Progressive, Allstate, and GEICO have the greatest number of people leaving overall,” he added. “Progressive, State Farm, and Allstate are signing the most new customers.”
Meanwhile, the overall cost of auto insurance has ballooned 20.3% since last year.
“The rate of inflation in auto insurance is especially striking when compared to the overall inflation rate, which is currently at just 3%,” Joey Von Nessen said, a research economist at the University of South Carolina’s Darla Moore School of Business.
“One key reason for the increase is the significant rise in automobile prices,” he continued. “Since January 2020 the average price of a vehicle in the U.S. has increased roughly 25.4%, due in part to the global computer chip shortage following the pandemic.”
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