Consumer satisfaction with auto insurers is at an all-time high, but new evidence suggests that that satisfaction shouldn’t prevent drivers from shopping for a better deal.
According to a
recent study from NerdWallet, the average driver could save $859 per year – or more than $70 a month – by shopping around for the best rates. That’s an average possible savings of 47% a year, though that fluctuates by zip code between a few hundred and several thousand dollars per year.
Unfortunately, consumer behavior does not match these proven results. Roughly 70% of consumers have been with the same auto insurance company for four or more years, thus missing out on an average of $3,436, according to NerdWallet.
What’s more, 38% of car insurance customers have never compared auto insurance quotes and only 16% compare rates yearly.
These study findings are in line with results from a similar analysis by insuranceQuotes.com, which suggests that one in four American drivers have been with the same auto insurance carrier for more than 16 years. Another 7% have stuck with the same carrier for more than 30 years and one in three say they never shop around for auto insurance quotes.
This behavior means many are missing out on discounts they could be taking advantage of, says insuranceQuotes.com senior analyst Laura Adams.
“Americans may think loyalty pays off, but when it comes to insurance, that’s not always the case,” Adams said. “Many people make the mistake of shopping only when they move or buy a new car, but data shows that rates fluctuate even when you haven’t had any major life changes. This is especially true for young people.”
Millennials are also among those least likely to shop around for auto insurance – and among the most ill-informed. Six in 10 millennials with auto insurance believe they must wait until their renewal date to switch insurance providers.
Other reasons survey respondents said they did not shop around for car insurance include opinions that it is time-consuming (62%), frustrating (44%) and complicated (40%).
Still, Americans did say they could see the value in frequent comparison shopping. Sixty-four percent told researchers that shopping for auto insurance is likely “worthwhile” and even “interesting.”
That should be a powerful motivator for insurance agents, who excel at comparison shopping and demystifying some of the more complicated aspects of choosing a policy.
“All it takes is an hour every year to compare at least three companies’ quotes – that’s worth it to potentially save hundreds, or even thousands, of dollars,” Adams said.
The survey included opinions of 1,000 adults living in the continental US. Research was conducted by Princeton Survey Research Associates International.