U.S. Auto Insurance Shopping Grows in Q2 2025 Amid Rate Reductions

The U.S. consumer auto insurance market showed continued growth in shopping activity during Q2 2025, with a 9.4% year-over-year increase in shopping rates and a 3.6% rise in new policies. This positive momentum reflects sustained marketing efforts and heightened price sensitivity among consumers, influencing ongoing elevated levels of auto insurance shopping and policy acquisitions. Direct channels and the non-standard market segments notably drove shopping growth, with direct channel growth reaching nearly 23% year-over-year, driven by renewed marketing campaigns and expanded risk tolerances among insurers.

Geographically, states like New Jersey, Texas, California, and Florida led in shopping volumes, indicating regional variations in consumer behavior. Targeted marketing and renewal outreach efforts prompted more existing policyholders to reassess and shop for insurance, observable in the 10.1% growth among shoppers with active policies, surpassing uninsured shoppers’ growth rate. Market dynamics also shifted towards rate reductions, as about 40% of rate filings among top insurers involved rate cuts, averaging a 4% decrease that contributed to increased consumer activity and consideration of switching providers.

New vehicle purchases also influenced insurance shopping patterns, with a 9% increase in consumers seeking quotes during vehicle shopping since early 2022. While insurance shopping has grown, new business generation linked to new vehicle transactions remained stable at 6-8%. There was a notable trend toward increased shopping among individual drivers and smaller households, highlighting affordability concerns amid tightening budgets. These smaller policy groups showed higher shopping and switching rates compared to multi-vehicle households.

With nearly half of all policies in force coming to market within the past year, retention strategies will be critical. Insurers may need to adopt more personalized retention and engagement efforts, particularly targeting smaller households and individual drivers to maintain competitiveness. The current period of rate decreases follows two years dominated by rate increases, but potential external factors like new trade deals could impact rate trends and market behavior in the latter part of 2025.

The LexisNexis U.S. Insurance Demand Meter provides this quarterly insight leveraging detailed transaction data that covers approximately 90% of U.S. insurance shopping activity, offering a comprehensive market-wide perspective. These findings provide valuable implications for market participants evaluating consumer behavior, pricing strategies, and retention initiatives amid evolving economic conditions and regulatory landscapes.