Rate Relief Spurs Record Auto‑Insurance Shopping, J.D. Power Finds
Regardless of the fact that premium rates may have stabilized since last year, policyholders continue to chase cheaper coverage as they become more enamored of embedded insurance. These are some of the main findings from the newly released 2025 U.S. Insurance Shopping Study from J.D. Power.
According to the survey, auto‑insurance premium growth slowed to “less than 2% at year‑end” 2024 after starting the year at 13%. This slowdown in premium growth translated into a banner quarter for auto insurance shopping, however.
Now in its 19th year, J.D. Power’s U.S. Insurance Shopping Study analyzes each stage of the auto‑insurance shopping funnel. The 2025 edition is based on responses from 12,720 customers who requested a quote from at least one competing insurer between April 2024 and January 2025.
Price volatility drives behavior
“Auto insurance rate taking reached multi‑decade highs in the first quarter of 2024, which put record numbers of customers into the market shopping for lower‑priced policies as the year progressed,” said Stephen Crewdson, managing director of insurance business intelligence at J.D. Power.
“As rate activity began to fall in the second half of 2024, many shoppers were successful at finding lower‑priced policies. That combination of increased shopping and less rate taking created a bit of a snowball effect for much of the year, but we are seeing signs that shopping rates are starting to normalize. A potentially bigger concern for the industry right now might be the increased interest many consumers are showing in embedded insurance providers, like auto dealers, financing companies and manufacturers.”
Purchase‑experience leaders
Erie Insurance ranks highest among large auto insurers in providing a satisfying purchase experience for the second consecutive year, with a score of 714. ACG (AAA) (707) ranks second and State Farm (699) ranks third.
USAA is not eligible in the ranking because it did not meet study award criteria.
Shoppers flood the market
Insurance price volatility spurred a surge in shopping activity. According to the report, more than half of auto insurance customers have actively shopped for a new policy in the past year, the highest shopping rate ever recorded in the 19-year history of the study. The following are two data points underscoring this trend:
- 57% of U.S. auto‑insurance customers actively shopped for a new policy in the past 12 months—the highest level in the study’s 19‑year history and up from 49% a year earlier.
- Shopping peaked during Q1-2024, when rate increases were at multi‑decade highs, and remained elevated even as pricing pressure eased.
Bundling and embedded options gain traction
Consumers are gravitating toward one‑stop insurance solutions—either by combining multiple policies under a single carrier or by buying coverage directly at the dealership—according to the study’s latest data. The good news being that consumers who bundle tend to have a longer tenure with an insurer. The following data points underscore this emerging trend:
- 33% of active shoppers are looking to bundle auto and homeowners’ coverage. Bundled customers keep their carrier 7.0 years on average versus 5.5 years for non‑bundlers.
- 37% of auto customers express interest in embedded insurance sold through dealers or manufacturers; the figure rises to 47% among Generation Y/Z shoppers.
Usage‑based insurance shows a tentative rebound
Telematics‑driven, usage‑based insurance (UBI) programs—whose rates hinge on real‑time driving behavior and mileage—have regained some momentum, though participation remains below earlier peaks. Seventeen percent of insurers offered shoppers a telematics‑driven usage‑based program, up from 15% in 2024 but still below 2023’s 22%.
All graphs and data courtesy of J.D. Power
