Americans are increasingly hunting for more affordable insurance options as premiums continue to surge, according to new data from LexisNexis Risk Solutions. The firm, which covers over 95% of the auto insurance market, reported a notable 16% increase in policy shopping rates in the second quarter of 2024 compared to the previous year. This trend accelerated in July, with shopping rates surpassing 30%.
The surge in insurance price comparisons is primarily driven by a sharp rise in premiums over recent years. While the general cost of living has increased by approximately 20% since the onset of the pandemic in 2020, auto insurance premiums have skyrocketed by nearly 50%.
Chris Rice, an executive at LexisNexis, highlighted that current shopping behavior is heavily influenced by these rising costs. Historically, policy shopping was often triggered by life events such as moving, purchasing a new vehicle, or adding a new driver to a policy. Now, however, the soaring costs are the main motivator for consumers seeking better deals.
The trend extends beyond auto insurance. Home insurance buyers are also facing higher costs and policy adjustments, leading to some customers being dropped by their providers. A recent Redfin survey revealed that over 50% of homeowners in California and 70% in Florida have experienced price increases in the past year. Additionally, 12% of Floridians reported being dropped by their insurance companies.
The escalating insurance costs are partly attributed to the increasing threat of extreme weather and climate-related risks. The Redfin study noted that the high cost of insurance is a significant factor driving relocation, with Floridians planning to move in the next year being twice as likely to cite insurance expenses as a reason compared to the national average.
Rice described the recent spike in premiums as “unprecedented,” emphasizing that middle-aged and older Americans are particularly active in searching for alternative insurance options. This shift suggests that financial pressures are particularly acute among these age groups, with older individuals increasingly seeking out new policies at a rate surpassing other demographics.
