Auto insurance premium increases in the U.S. slowed in 2024, ending the year with a rate of less than 2%, down from 13% at the start of the year. Despite the easing in rate hikes, more drivers began shopping for insurance, according to the J.D. Power 2025 U.S. Insurance Shopping Study released today.
The study found that 57% of auto insurance customers shopped for a new policy in the past year, up from 49% the year before. This represents the highest level of shopping activity since the study began 19 years ago. Activity was highest in the first quarter of 2024, aligning with elevated premium increases, and continued even as pricing began to stabilize later in the year.
“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.”
One-third of customers currently shopping for auto insurance said they are also seeking to bundle their auto policy with a homeowner’s policy. According to the study, customers who bundle tend to stay with their insurer longer—an average of seven years compared to 5.5 years for those who do not—making them a key segment for insurers looking to retain policyholders.
Interest in embedded auto insurance—offered through auto dealers, manufacturers, or financing companies—was reported by 37% of respondents. This type of insurance attracted more attention from younger customers, particularly those in Generations Y and Z, with 47% expressing interest. Among those who cited service as their primary reason for shopping, 48% said they were interested in embedded options.
The study also found that usage-based insurance programs saw a modest increase in availability. Seventeen percent of insurers offered these programs to shoppers, up from 15% in 2024, though still below the 22% reported in 2023. These programs use telematics to track driving behavior and determine rates based on mileage and driving patterns.
In terms of customer satisfaction with the purchase experience, Erie Insurance ranked highest among large auto insurers for the second consecutive year, with a score of 714. ACG (AAA) followed with 707, and State Farm scored 699.
The J.D. Power U.S. Insurance Shopping Study tracks consumer behavior throughout the insurance shopping process. The 2025 study is based on responses from 12,720 customers who obtained an auto insurance quote from at least one competing provider in the previous six months. Data collection took place from April 2024 through January 2025.
