Auto insurance

New JD Power Survey Shows Consumers Are Switching Car Insurance To Save Money – What Makes This A Smart Financial Decision?

Korrawin/Getty Images/iStockphoto

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

See: What is the highest income for food stamps in 2022?
Find: 22 side gigs that can make you richer than a full-time job

For drivers, working from home meant saving time and money by avoiding long journeys. These becoming a daily reality again, more and more people are rethinking their use of the car and looking to save money.

Bonus offer: Open a new Citi Priority Account by 09/01/23 and earn up to $2,000 in bonus cash after completing the required activities.

Car insurance is a necessity for drivers, but once settled, many drivers stick with their chosen insurance company, even if they don’t get the best deal. According to a recent JD Power report, more and more drivers are now looking for better car insurance rates (and switching insurance companies to save money).

In its Q2 2022 Quarterly Shopping List Report, JD Power says drivers are comparing quotes and switching insurance more often, according to Fox Business. There was an 11.8% increase in the rate at which drivers received new car insurance quotes compared to the second quarter of 2021. Additionally, in the second quarter of 2022, customers switched insurance providers at an increased rate of 3.6% year-on-year.

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

Simply put, having the ability to switch insurance carriers is a user-friendly practice that allows for more competitive pricing. It is always wise for insurance buyers to seek out the best possible deal, despite the company’s feelings of loyalty to a given insurer.

Bonus offer: Find a chequing account that fits your lifestyle. $100 bonus offer for new current account customers.

Prepaid, telematics-based car insurance is on the rise

PAYG insurance is also becoming more popular, as is telemetry, according to the study. By wirelessly tracking a person’s driving habits, telematics can monitor safe driving and provide a potentially better insurance premium rate.

“More and more consumers are open to the idea of ​​using a telematics tool to improve driving safety, while reducing costs,” said Michelle Jackson, director of TransUnion. TransUnion collaborated with JD Power on the Quarterly Shopping List Report. “Consumers are looking for lower premiums, better coverage and superior service from their insurer,” Jackson added.

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

Take our survey: How do you typically split the restaurant bill?
More: The safest places to retire outside the US

“As consumers seek lower premiums, they are increasingly turning to usage-based insurance (UBI) programs to help mitigate increased mobility costs,” JD Power said in its report. .

“Since LIST began tracking both purchases and overall UBI usage, we have seen a steady increase in adoption, especially by those in lower self-reported credit levels, a trend that is expected to continue. continue as macroeconomic pressures continue to impact consumers – particularly those who are price-sensitive,” the report adds.

More from GOBankingRates