Buying auto insurance has slowed this year, but many Americans are still looking for new insurance to save money rather than being called out because of a new car purchase, according to new reports.
The auto insurance purchase rate fell to 11.7% in the third quarter of 2022, down from 11.8% in the previous quarter, according to JD Power’s quarterly auto insurance LIST report in collaboration with TransUnion. And auto insurance purchases declined 3% annually in the second quarter of 2022, according to TransUnion’s Personal Lines Insurance Trends and Perspectives Report.
“While overall auto insurance shopping has declined, the percentage of shoppers who are looking for new auto insurance but don’t also want to buy a vehicle has increased,” the TransUnion report said. “In other words, a higher percentage of buyers do so because of price or some other factor unrelated to a change in the car they drive.”
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SURVEY SAYS INFLATION WILL MAKE MANY AMERICANS TO LIMIT INSURANCE POLICIES TO SAVE MONEY
Auto insurance buying slows in 2022
According to the JD Power and TransUnion report, auto insurance purchases are trending downward due to factors such as high auto prices and low inventories, as well as rising gasoline prices and interest rates.
But even as more consumers seek to lower their insurance premiums, an 11% drop in new auto insurance purchases by higher-risk consumers has severely dampened overall purchases, TransUnion’s report found.
“The lack of new car purchases has suppressed overall auto insurance purchasing,” said Michelle Jackson, senior director of personal property and casualty insurance for TransUnion’s insurance business. “Even with the influx of consumers buying their auto insurance as premiums rise from industry-wide rate increases, it can’t overcome the suppressed purchase rates we’re seeing from consumers not buying new cars, creating a shopping event.”
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STOCKS OF NEW CARS ARE UP AND PRICES FALL, BUT NOT YET BY A LOT
Homeowners insurance purchase rates vary by region
Home insurance purchases were more resilient than auto insurance purchases in the second quarter of 2022, growing 4% annually, according to research from JD Power and TransUnion.
The slight increase in home insurance purchases was mainly due to an increase in the South. Home insurance purchases in the region rose 12% year over year in the second quarter.
“We’re still seeing interest in moving to sunnier environments, which has led to increased homeowners insurance buying in states like Florida and Texas, which ironically are states that are more prone to extreme weather events and more expensive insurance,” Jackson said in one press release.
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INFLATION KEEPS CONSUMER CONFIDENCE AT A THREE-MONTH LOW
Inflation continues to impact the home and auto insurance industries
Almost all Americans, or 95%, say inflation is a problem and 38% say they are extremely concerned, according to TransUnion’s latest Consumer Pulse Survey.
Experts expect inflation to remain high into 2024 and say the Fed may not meet its 2% inflation target by then, according to the latest forecast from the Mortgage Bankers Association (MBA). The Federal Reserve has recently attempted to lower inflation by raising interest rates, which could push up auto and home insurance premiums in the coming months.
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