Americans Insurance Love-Lack: But Few Shop Around
In the last year, the cost of insurance has affected many Americans who have insurance other than health care. A survey by NerdWallet found that 12% of them didn't make big purchases because of insurance costs and 11% reduced their coverage to save money.
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| Americans Insurance Love-Lack: But Few Shop Around |
Surprisingly, only 28% of these insurance owners looked for cheaper insurance prices in the past 12 months. The survey, conducted in June 2023 by The Harris Poll and involving over 2,000 Americans, asked how people with insurance and those searching for it felt about their coverage and the prices they were paying.
Key Points:
1. Many Americans facing higher insurance prices. More than half of auto insurance owners (57%) saw their premiums rise in the last year, and 17% experienced significant increases. For homeowners insurance, 62% saw premiums go up, with 19% facing substantial increases.
2. Millennials actively compare insurance rates. Almost 2 in 5 millennials with insurance (ages 27-42) (39%) shopped around for lower rates in the past year. Additionally, 45% of all millennials plan to compare prices in the next year.
3. Concerns about homeowners insurance future. About 1 in 10 homeowners insurance owners (9%) worry that their insurance company might stop providing coverage in their state.
Rising Insurance Costs
Both homeowners and auto insurance holders have experienced higher insurance premiums in the last year. About 3 in 5 homeowners (62%) and a similar proportion of auto insurance owners (57%) saw their premiums go up.
Among different age groups, baby boomers (ages 59-77) reported the highest rate of increases. Seven in 10 (70%) of them experienced higher homeowners insurance rates, while 65% saw the same for auto insurance.
In comparison, 58% of millennials and 55% of Generation Xers (ages 43-58) saw their homeowners insurance rates increase, and 49% of Generation Zers (ages 18-26), 53% of millennials, and 51% of Gen Xers faced higher auto insurance premiums.
For those hoping for a decrease in premiums, the numbers are low. Only 10% of auto insurance owners and 6% of homeowners insurance owners saw their rates go down in the past year.
Renters Insurance Costs and Impact
Out of the 15% of Americans who have renters insurance, 43% noticed an increase in their rates over the last year, while the same proportion (43%) experienced no change in their rates.
The Struggle with Rising Costs
Some insurance policies are compulsory by law or agreement, and when their costs go up, people have to find ways to manage the expenses.
Around 12% of American insurance owners decided in the past year to avoid significant purchases like cars, homes, or vacations due to the high costs of insurance. Among Gen Z insurance owners, 22% made such decisions, and for millennials, it was 18%.
Considering Costs for Future Purchases
Both home and auto insurance holders take insurance costs into account when planning for future purchases. About 27% of auto insurance owners consider insurance costs when buying a vehicle, while 18% of home insurance owners do the same when shopping for a home.
Cost as a Barrier to Adequate Coverage
For some, the cost becomes a hurdle in getting the insurance coverage they need. Approximately 10% of insurance owners say they require more coverage for existing policies or need new insurance products, but they can't afford them at the moment. Among Gen Z insurance owners, this figure stands at almost 19%.
Managing Expenses and Insurance Worries
As insurance costs rise and become a challenge for other purchases, many Americans feel their current rates are not fair. Only about 2 in 5 homeowners insurance owners (42%) and 45% of auto insurance owners believe their rates are fair.
Beyond costs, some Americans have concerns about their insurance providers. Around 1 in 10 homeowners insurance holders (9%) worry that their provider might stop operating in their state, as seen in some recent cases in California and Florida.
Happiness with Insurance Providers and Switching Plans
Less than half of Gen Z (42%), millennials (43%), and Gen X (46%) insurance owners express overall satisfaction with their insurance providers, while 61% of baby boomers are happy with theirs.
However, only 24% of insurance owners plan to switch providers to save money in the next year. Gen Z (32%) and millennials (38%) are more likely to switch, while Gen X (22%) and baby boomers (14%) are less likely.
Comparison Shopping for Insurance
About 2 in 5 Americans (38%) intend to compare insurance prices in the next 12 months, with millennials (45%) being the most likely to do so. Gen Z (38%), Gen X (35%), and baby boomers (35%) are less likely to compare prices.
Where People Seek Insurance Guidance
The most trusted sources for insurance advice are family members (48%) and insurance agents (45%). Friends (28%) and financial advisors (27%) are less frequently relied upon. About 23% of Americans trust information from insurance company websites for guidance on policies.
Average Auto Insurance Rate Methodology
To find the average auto insurance rates, NerdWallet used information from Quadrant Information Services, a company that analyzes pricing data. They looked at rates for men and women in all ZIP codes across all 50 states and Washington, D.C. Liberty Mutual was not included because they didn't have the needed information.
Their analysis focused on a 35-year-old driver with a good driving record and a good credit score. The rates they calculated are averages and might not match exactly with individual cases.
The rates were based on specific coverage limits, including liability coverage, uninsured motorist coverage, collision coverage, and comprehensive coverage. In some states, minimum additional coverage was included. They used a 2020 Toyota Camry L and assumed the driver would travel 12,000 miles per year.
Remember, the rates they provide are general averages. Your actual rates could be different based on various factors like your personal information, location, and insurance provider.
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