More consumers were shopping and switching insurance because of rate hikes during Q1, according to a new report from J.D. Power that TransUnion collaborated on. 

About 12.8% of consumers were shopping for new insurance in Q1, compared to 12% in Q4, the report says. The switch rate rose from 3.6% to 3.9% during the same time period. 

Consumers reported the main reason for shopping for insurance was because of the cost of their insurance. Twenty-one percent of consumers said their primary reason for shopping for auto insurance was because of a rate that was too high, according to the report. This has increased from 16.9% reported in Q1 2016 when the main reason was because consumers were just browsing. 

Another 14% of consumers said they were shopping for new insurance because their rate had a non-claim-related increase. 

The report says shopping was decreasing in Q4 and Q3 of 2023. The report speculates consumers shopped the first half of the year and relented to the costs the latter half of the year. 

About 12.1% of consumers shopped for rates in January, 12.4% in February, and 13.5% in March. 

March was the highest rate for a single month since September 2020 when data first started being tracked, according to the report. 

The South region saw the largest increase in shopping with a 14.4% rate compared to 13.2% last quarter. 

Auto insurance increased by 2.6% in March from February and a 22% increase from a year ago, according to the U.S. Bureau of Labor Statistics’ most recent inflation report. Auto repair costs increased 1.7%, up 8.2% in a year. Gasoline costs also increased 1.7% in March with an annual increase of 1.3%. 

Yahoo Finance reported recently that auto insurance’s 22.2% annual increase is the largest since December 1976 when prices increased 22.4%. 

Insurers point to pandemic losses from part delays, rising labor costs, and used car values as causing the hiked rates in recent years. The rate hikes continually receive criticism from consumer advocacy groups who’ve claimed insurers are overstating needs and overburdening the consumer. 

As insurers raise premiums, collision repair shops have simultaneously noted an increase in consumer responsibility for out-of-pocket expenses due to short payments. 

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