Decline in Auto Insurance Shopping with Increased Switching Rates in Q2 2026

Auto insurance shopping activity saw a decline in the second quarter of 2026, yet an increase in switching rates among consumers, as revealed by J.D. Power's Personal Lines Insurance Quarterly Report in collaboration with TransUnion.

This nuanced trend hints at evolving consumer behavior across personal lines, including home and renters insurance, where switching rates also climbed even as shopping patterns varied. For auto insurance, the shopping rate decreased to 12.6%—a slight 0.4 percentage point dip from the previous year and a full percentage point drop from the first quarter of 2026. Despite fewer consumers shopping, the switching rate rose to 4.5%, showing a 0.3 percentage point increase both annually and quarterly. Notably, the median premium transferred during these switches was over $3,200, underscoring significant financial movements in the market.

Trends in Home and Renters Insurance

The home insurance sector saw a shopping rate of 7.1% this quarter, signifying a 0.6 percentage point rise year over year, although it represented a 0.3 point decline from Q1. While the switching rate held steady at 2.5% from the previous year, it ticked upward by 0.3 percentage points from the previous quarter. This trend aligns with a decrease in shopping activity that began in late 2025, which sharply fell by June. However, consumers continued to switch providers, with rates climbing from May through June.

Similarly, renters insurance experienced comparable trends. Shopping activity reached 6.3%, increasing by 0.4 percentage points compared to last year's figures but falling 0.1 points from Q1. However, switching rates painted a different picture, dropping 0.8 percentage points year over year to 3.4%, yet refining a quarterly increase by 0.4 points. The stability in shopping in April and May was followed by a decline in June, contrasting with a consistent uptick in switching rates since February.

Factors Driving Consumer Behavior

The report highlights affordability as a critical determinant in insurance purchasing and retention. TransUnion notes that consumers with financial flexibility are actively shopping for better deals, while those under financial pressure, many of whom are younger drivers, are more likely to cut back on coverage or let their policies expire. Affordability pressures could be influencing these switching patterns, as searching for cost-effective options becomes imperative for financially constrained individuals.

Impact of AI on Insurance Choices

Adding a technological layer to the evolving landscape, J.D. Power introduced findings from its AI Insurance Experience Study. It showed that AI-driven tools are influencing consumer decisions within the insurance sector. While only 19% adhered fully to AI-generated recommendations, 49% partly adopted them, and 26% considered but ultimately did not follow them. Interestingly, 37% of consumers altered their insurance policies after employing AI-assisted tools, demonstrating the growing role of technology in insurance decision-making.

Implications for the Insurance Industry

For insurance professionals, these patterns of consumer behavior highlight the importance of addressing both affordability and technology adoption challenges. The shifting dynamics reinforce the need for carriers, brokers, and agents to embrace technology not only to enhance customer interactions but also to offer competitive pricing. Staying attuned to these macro trends is crucial for sustaining consumer engagement and loyalty in a rapidly changing landscape.