The Zebra Newsroom

Insurance shopping trends fluctuate post-pandemic

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Consumer shopping behavior has been anything but predictable post-pandemic — with the tug-of-war between supply and demand in both the auto and home insurance markets, climate change, and economic impact fallout resulting from coronavirus taking the P&C industry for a spin. Q2 2021 revealed a stall in auto insurance shopping and a steady rise in home insurance shopping. 

The global chip shortage stalled production of more than 121,000 vehicles in North America in April 2021, resulting in fewer new vehicles for car shoppers. This caused a ripple effect throughout the entire industry, impacting the used car market, collision repairers as well as part suppliers. Some shoppers are even being advised to hold off on shopping for a car until the market has shifted in the buyer's favor, which might not occur until 2022. 

Another key player in the recent stall of auto insurance shopping is shoppers dealing with the economic impact of the pandemic. The series of stimulus checks and pandemic relief efforts only boosted sales temporarily. Although several carriers provided policyholders with discounts and rebates throughout the pandemic, many customers (43%) were unaware of these efforts. In a report by Deloitte, financial inequality was exacerbated by the pandemic and probably won’t shift any time soon — the gap between those at the top of the income ladder and those at the bottom will only widen, with those at the bottom finding it even more difficult to spend on things like insurance, healthcare and retirement. 

In addition, auto insurance consumers are increasingly willing to leave brands they were previously loyal to as well. According to the J.D. Power 2021 Insurance Shopping Study, 17% of survey respondents reduced their coverage, 15% shopped for a new auto insurer, and 12% switched to another carrier. In addition, nearly half of customers said they would switch providers if they could receive a savings of $200 or less. The pandemic (and its economic impact) fallout was suggested to be the main driver of consumers shopping for better rates.

Although it is unclear how quickly people will return to their old pre-pandemic driving and car shopping habits, activity has shown to largely follow population migration trends, with the South and Southwest becoming key battleground regions.

On the flip side, home insurance shopping has seen an uptick post-pandemic. Unlike auto insurance shoppers, home insurance shoppers seem to still be in the discovery phase of looking at policies and seem to be more willing to shop around, add on coverages and evaluate their insurance needs. In a survey conducted by The Hanover Insurance Group, 70% of adults stated that they had an insurance blind spot in their lives due to uncertainty in the types of insurance coverage they needed. Almost 80% said they didn't know homes above certain price points might need special coverage, and weren’t aware that there was a difference between a home’s market value and its replacement value. 

Also, TransUnion conducted a study and found that property insurance shopping increased almost 25% in March 2021 compared to the year prior. A few factors driving some of these gains include climate change, low interest rates, more work-from-home arrangements, and the race for space. The rise in home improvement projects also played a role, with the study reporting that almost 75% of respondents who made improvements to their homes also changed their home insurance policy.  

Climate change has undeniably played an important part of the rise in home insurance shopping. With the increasing frequency and intensity of major storms paired with the slowly recovering lumber shortage, policyholders are finding more reason to keep an eye out on what coverages they have and how much they are willing to get covered. From replacement cost to deductibles to flood coverage and renters insurance, the unpredictable climate has shoppers more willing to find the policy they need. 

Despite the current stall in auto insurance shopping, the P&C insurance industry’s 2021 direct premiums written is still expected to reach its highest growth (5.8%) in 18 years. Learn how carriers have been mirroring these consumer buying trendshere.

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Jasmine Kim
Jasmine KimB2B Content Manager

Jasmine is The Zebra’s newsroom content writer. With a background in journalism, she reports on breaking news, trends, mergers and acquisitions, and financial reports related to the insurance industry.