Rising Insurance Costs Drive Record Auto Policy Shopping in 2024

A recent LexisNexis study highlights a significant increase in comparison shopping among auto insurance policyholders in 2024, reaching over 45%, the highest rate recorded. The surge is attributed to rising auto and home insurance premiums across most states and intensified marketing efforts by insurers. Insurify forecasts that by the end of 2025, full-coverage auto insurance costs will escalate by 7%, while home insurance premiums are expected to increase by 8%.

Despite drivers traditionally maintaining their insurance provider for an average of 5.5 years, and even longer when bundling policies, established customers exhibited notable shopping and switching behaviors in 2024, contributing significantly to new business for insurers. This trend poses challenges for the property and casualty insurance sector, where retention is generally more cost-effective than acquiring new clients.

Experts note that escalating rates may initiate a cycle of increased shopping and switching, potentially pressuring insurers to raise rates further. The LexisNexis report recommends that insurers intensify retention strategies, particularly targeting long-standing customers entering the shopping market, to stabilize their customer base amid heightened market activity.