Auto Insurance Shopping Stays Brisk
One segment is looking around more for better rates, signaling a market shift, report says.
Auto insurance rates may have settled for the majority of consumers to historical patterns, though it remains to be seen how larger economic shifts could affect conditions, TransUnion said.
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Higher-risk auto consumers shopped around more for insurance in the first quarter, a sign that insurers may have raised rates on those segments more than others, TransUnion research finds.
Auto insurance shopping has been on the rise over the past year as consumers try to secure better rates amid a trend of premium hikes. Overall shopping around increased 10% year-over-year in the first quarter, compared to 5% among home insurance consumers, the consumer credit reporting agency said.
But for the first time since the fourth quarter of 2021, higher-risk auto consumers were the most active among the shoppers, according to TransUnion, which said the trend may indicate insurers have switched up their strategy.
“Insurers may have returned to traditional practices of focusing rate increases on higher risk segments, rather than across the board,” the company said in its report. “As a result, higher-risk customers are still shopping for lower rates, while mid- and low-risk customers may have seen their rates stabilize.”
Auto insurance rates may have settled for the majority of consumers to historical patterns, “which correlate price sensitivity closely to relative insurance risk,” said Patrick Foy, senior director of strategic planning for TransUnion’s Insurance business.
Still, overall economic volatility could muddy that picture, he said.
“… uncertainty in the cost and availability of parts for vehicle and home repairs could eventually lead to a return of broad-based price increases …”
Originally posted on Auto Dealer Today
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