Soaring insurance rates : The switch rate increased to 3.9%, up from 3.6% at the end of 2023. Consumers cited the cost of their insurance as their primary reason for shopping. Nearly 22% mentioned shopping due to high rates, compared to 16.9% in the previous quarter.
Introduction
More consumers are looking at new insurance options because they can’t afford their current premiums, according to iStock.
Survey Findings
A new survey from J.D. Power and TransUnion indicates that consumers will begin reassessing their insurance premiums in the first quarter of 2024 in search of more affordable options.
Trends and Statistics
After two consecutive quarters where consumers accepted the lack of discounts, insurance purchase rates began to rise. In January, purchase rates increased from 11.7% to 12.1%, in February to 12.5%, and in March they jumped to 13.5%. Southern consumers were switching premiums at a faster pace than any other region in the U.S., with the switching rate rising to 3.9% from 3.6% at the end of 2023.
Reasons for Shopping Around
The primary reason consumers are shopping for new insurance is the high cost of premiums. About 22% of consumers said they purchased new insurance because premiums were too high, up from 16.9% last quarter. Additionally, 14.6% shopped for a new insurance company due to recent premium increases, up from 7.9% last quarter.
Seasonal Trends and Future Outlook
The report noted, “Purchasing intent for both property and auto insurance declined at the end of 2023, primarily due to expected seasonality.” As the industry progresses into 2024, market trends are likely to change, but purchasing intent is expected to remain strong throughout the year.
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Auto insurance rates continue to rise
Survey Findings
According to a recent survey by Zebra, the average amount drivers will pay for car insurance in 2023 is projected to be $1,841, marking a 5% increase from the previous year. This follows a projected 15% increase from 2022 to 2023. Unfortunately, similar trends are expected to persist in 2024.
Regional Disparities
Where you live significantly impacts your insurance costs. In states affected by weather-related disasters, insurers may withdraw policies or offer fewer options, leading to higher premiums for buyers.
Vehicle Make and Model
The make and model of your car also influence insurance premiums. Drivers of Kia and Hyundai cars may struggle to find insurance, as certain models are more prone to theft.
State Premium Rankings
Florida and Louisiana top the list of states with the highest annual premiums, averaging over $2,700 per year, which is 47% higher than the national average. Conversely, drivers in Vermont and Idaho enjoy the lowest annual premiums, 35% below the national average. Nineteen states currently have average annual premiums exceeding $2,000.
Insurance Comparison
If you’re in the market for new car insurance, the Credible marketplace allows you to compare multiple providers and find personalized rates in minutes, without affecting your credit score.
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How to Lower Your Car Insurance Premiums
Switching Car Insurance: Tips to Consider
With premiums expected to increase this year, drivers should contemplate switching their car insurance coverage before renewing their existing policy to secure a better rate. Here are some tips if you’re considering making the switch:
- Know What You Want: Have a clear plan and understand your insurance needs. Identifying areas for improvement before switching can enhance your chances of securing the best rate.
- Get Multiple Quotes: Compare identical auto coverage strategies and limits from various insurance companies to ensure you receive the best possible deal. Aim to obtain at least three different quotes for comprehensive comparison.
- Contact Your Current Insurer: Inform your current insurance provider about your intention to switch. They might offer you a more competitive quote. Additionally, inquire about cancellation fees and potential refunds if you prepaid but plan to cancel midway. Avoid canceling your existing policy before purchasing a new one to prevent loss of coverage.
If you’re in search of new auto insurance, leverage the Credible marketplace to compare multiple providers and discover a tailored rate within minutes, without affecting your credit score.
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