Auto insurance shopping rebounds, TransUnion confirms

What appeared to be a decline in auto insurance shopping because of high premiums throughout the industry has ended, as the latest reports from TransUnion and J.D. Power indicate.

“Q4 2023 did see a seasonal dip in insurance shopping activity, which is typical for that time of year,” stated Stothard Deal, vice president of strategic planning in TransUnion’s insurance business, in a written response to questions. “Year-over-year auto insurance shopping volume rebounded in Q1 2024 as consumers (especially in the high credit-based insurance score/low-risk segment) sought lower premiums.” 

Increased prices for autos themselves contributed to the decline in shopping, but despite higher interest rates, consumer interest in buying or leasing a new vehicle has increased, according to Deal. 

TransUnion’s “Q2 2024 Insurance Personal Lines Trends and Perspectives Report,” comprised of consumer research and TransUnion data, found that about 23% of consumers plan to buy or lease a vehicle to replace an existing one in the next 12 months, up from 17% in 2023. The change in the number of auto insurance shoppers was near zero by the end of December 2023, but increased by almost 10% by March.

In the U.S., certain regions had higher shopping, but for different reasons. In the Midwest, low premiums and incomes coupled with significant rate increases prompted more shopping, according to the report. In the West, consumers told TransUnion that higher living costs and inflation pushed them to shop for insurance in response to financial pressures.

Home insurance shopping rates have stayed mostly flat, because high interest rates discouraged home buyers overall, according to Deal. “Despite recent moderating trends in property insurance shopping, volumes [of shopping] remain elevated compared to recent history due to the digitalization of the property insurance new business and underwriting process,” he stated.

Home insurance rate increases from 2022 to 2023 incited more shopping, according to TransUnion’s report. Also, rising interest rates began driving up mortgage rates. At the end of 2023, mortgage originations dropped to a level not seen since 2005, but housing market experts expect a rebound starting this year.