Q2 data from JD Power showed that switching continued to be as high as in the previous quarter.
Rates continued to be an obstacle for auto insurance companies in this year’s second quarter, according to the JD Power Q2 2023 US Auto Insurance Shopping LIST Report.
Insurers have been increasing rates to keep up with costs, sending drivers to look for cheaper options.
As auto insurance rates keep climbing, drivers have been looking into different coverage options in an effort to find options that will be more affordable. The report showed that while shopping around for a policy was up last quarter, it remained high this quarter as well.
In a more troubling trend, the cost of coverage is causing some people to let their policies lapse. A recent TransUnion survey’s results showed that nearly 15 percent of drivers admitted to using a vehicle or owning one without valid coverage at some point within the first half of the year. About 30 percent of those respondents who said they’d been behind the wheel without coverage said that they reason they did so was that they weren’t able to afford to pay the premiums. This was the top reason they gave for having driven without coverage.
The quarterly auto insurance quote rate rose from 12.4 percent in the first quarter to 12.5 percent in the second.
The 12.5 percent quote rate in the second quarter represents the highest rate of shopping around for vehicle coverage that JD Power has recorded in its three years of tracking that trend. The report showed that there is a seasonality to shopping for coverage. The highest coverage rates typically occur in April, which is tax season, when a higher number of people are looking for a new or replacement vehicle. That said, in 2023, there has been a shift in that trend.
This year, March represented the highest monthly shopping rate, at 13.1 percent. In April, there was actually a drop in shopping around for a new policy, though it was still higher than the average for the first half of the year, at 12.6 percent. In May, shopping around for auto insurance rose again, reaching 12.8 percent, only to dip back down to 12.1 percent in June.