Americans don’t love their insurance, but most do not shop around

According to the latest NerdWallet study, over the last 12 months the rising cost of health insurance caused more than one in ten Americans to avoid making major purchases. A similar percentage (11%) reduced their insurance coverage to reduce costs.

Only about one-quarter of people who have insurance other than health coverage say that they have shopped for cheaper insurance rates in the past 12 months.

In a survey conducted in June 2023 by The Harris Poll of over 2,000 Americans (defined as people who have insurance other than health insurance), the Harris Poll asked about how consumers and insurance owners felt about their products and prices.

• Some Americans have experienced large price hikes. Over half (57%) of car insurance holders say their rates increased in the last 12 months. And more than one in six (17%) said that premiums rose a lot. In the same period of time, homeowners’ insurance premiums rose for 62% and 19%.

• Comparison shopping among millennials (ages between 27 and 42). Nearly 2/5 of insurance-owning millennials (39%) have shopped around for lower rates in the past 12 months. 45% say that they plan to compare prices within the next year.

• Homeowners insurers are a source of concern. Nearly one in ten Americans (9%) with homeowner’s insurance are concerned that their insurer will cease to provide coverage in their home state.

Auto and homeowners’ insurance policyholders both report that their premiums have increased over the past 12 months. Around 3 out of 5 homeowners (62%) report that their insurance premiums have increased in the past 12 months. Auto insurance holders (57%) also say that their premiums have increased.

Owners of baby boomers (ages 59 to 77) reported the most increases. 70% of homeowners say their insurance rates have increased in the last 12 months. This is compared with 58% for millennials (age 43-58) and 55% for Generation Xers. 65% baby boomers say they pay the same amount for their auto insurance, compared with 49% Generation Zers (18-26 years old), 53% millennials, and 51% Gen Xers.

Just 10% of auto owners say that their rates have decreased in the past 12 months. Only 6% of homeowners who have insurance say that rates are down.

Ben Moore, NerdWallet’s insurance expert, says that car insurance rates are likely to increase across the country. The increase in premiums may be surprising to drivers who haven’t made a claim for a long time or been cited with a traffic violation. The factors include inflation, natural disasters and state legislation, as well as the increasing danger of driving. ”

Renters’ insurance rates have increased for 43% of Americans in the past 12 months. The same percentage (43%) has not seen any change.

Insurance products may be required by law, or contract, but when the cost of these policies rises, consumers are forced to come up with ways to cover them.

In the last 12 months, more than one in ten American insurance holders (12%) said they had decided not to purchase a large item such as a home, car or vacation because of insurance costs. A quarter of Gen Z and a fifth of millennials who own insurance have decided not to make a large purchase due to insurance costs.

Both auto and home policyholders consider these costs when making future purchases. Around a quarter (27%) of car insurance holders say that they take into account the insurance cost when purchasing a new vehicle. Home insurance holders are 18% more likely to consider the cost of insurance when buying a house.

Even when consumers require more insurance coverage, cost can be an obstacle to purchase. Insurance owners say 10% of them need to increase coverage on their current policies, or they want a different insurance product that is not currently affordable. This includes nearly 1/5 of Gen Z owners who have insurance (19 %).).

It’s no surprise to find that many Americans do not think the current insurance rates they pay are fair. Insurance premiums have been rising, and some consumers see them as an obstacle in their way of making other purchases. About 2 out of 5 homeowners (42%) think that their insurance rate is reasonable. The story is similar for auto insurance holders, who say their rates are fair.

Some Americans are concerned about more than just the cost. 9 percent of homeowners with insurance policies are concerned that their insurer will cease to operate in their state. Recent events in certain states have confirmed this. California lost several home insurance companies such as State Farm, Allstate and others in the past year. Farmers stopped issuing new homeowner policies in Florida.

A little less than half (42%) of insurance owners from Gen Z, millennials (43%) or Gen X (46%), say that they are generally satisfied with their insurers (61% say the same for baby boomers). Just 24% of owners plan to change insurance companies to save money within the next year. This is more common for Gen Z (32%), millennials (38%) and baby boomers (14%). Insurance owners from Gen X (22%), baby boomers (14%), and Gen Z (32%) are the least likely to change.

Around 2/5 of Americans (38%) plan to compare prices for insurance in the coming 12 months. Millennials are the most likely (45%) to do so. Gen Zers (38%), Gen Xers (30%), and Baby Boomers (35%), are less likely to be comparing prices.

Moore advises that you can get cheap car insurance if your shop around for quotes and compare at least three insurers. The rates charged by insurers vary. In addition, the price of car insurance is dependent on who you are. You may have a friend who gets a good rate with a particular insurer. However, you will not know whether that is the best option for you unless you compare rates. ”

Families (48%) are the number one source Americans trust to give them advice on their insurance policies. Families (48%) are the most trusted source for Americans to get advice on their insurance policies. Insurance agents are a distant second with 45%. Financial advisors (27%) and friends (28%) are right behind. About a quarter (23%) of Americans trust the websites of insurance companies for advice on policy.

The baby boomers, however, are the only group that has a higher proportion of trusting a third party than they do their family. 52% said they trusted insurance agents while just 35% trust their own families for guidance. Around 7 out of 10 Gen Zers, 54% of millennials, and 46% Gen Xers, trust their family’s advice.

70% of Americans say that they have auto insurance. The ownership rate is lower for Americans who have lower incomes. Nearly half of Americans who earn less than $50,000 per year say that they own an automobile, while the percentage for those with household incomes above $50,000 is 77 %.

Mortgage lenders usually require homeowners insurance, but it is not a legal requirement. About half (54%) of Americans say that they have homeowners insurance. Ownership rates increase with Americans’ aging. Only about a quarter (24%) of Gen Zers own home insurance, compared with 44% of millennials and 53% of Gen Xers, as well as 76% of Baby Boomers.

Only 9% of Americans own flood insurance. This covers damage to property caused by flooding and major storms, including hurricanes.

Sarah Schlichter is a homeowner insurance expert at NerdWallet. She says that many people do not realize they aren’t covered for flooding damage until it’s already too late. Flooding can occur anywhere due to heavy rain, so consider flood insurance even if your home is not on the coast .”

Fewer than half (42%) of Americans say that they have life insurance. This does not include insurance offered by their employer. A quarter of Americans (27%) own permanent insurance such as whole life, universal or permanent burial policies. About 1 in 5 people (21%) owns term life insurance that expires at a certain time. This is usually 10, 20, or 30 years ).

In addition, 10% of Americans own insurance for their motorcycles, RVs, or boats. Men are more likely to own insurance in both categories than women. In the case of long-term care insurance, 13% men own it compared with 10% women. For motorcycle, RV, or boat insurance 13% of the men own it compared to 8% of the women.

Around 1 in 10 Americans (12%) owns pet insurance. This number jumps up to 19% for Americans who have children living in the household. The percentages are also higher among Gen Z Americans (19%), millennials (20%) compared with older generations (9% of Gen Xers and 4% baby boomers ).

The Harris Poll conducted this survey online in the United States from June 1-5 2023 among 2 066 U.S. adults 18 years and older. Harris’ online polls are measured using Bayesian credible ranges. The sample data for this study is accurate within +/-2,7 percentage points when using the 95% level of confidence. Please contact [email] for the complete methodology of this survey, which includes weighting variables, subgroup samples sizes and sample size.

NerdWallet calculated the average auto insurance rate based upon public filings obtained from pricing analytics firm Quadrant Information Services. For men and for women, we compared rates in each ZIP code of all the 50 states, plus Washington, D.C. Liberty Mutual, despite being one of America’s largest insurance companies, was not included in this analysis because there is no publicly-available information.

We analyzed the average rate of full-coverage auto insurance in the United States based on the profile of a 35 year-old male driver who had no driving violations. A “good-driving” discount was also included. The insurers considered our hypothetical driver’s credit rating “good”. The “good” and “poor credit” rates are calculated based on approximations of credit scores and don’t take into account the proprietary scoring criteria that insurance companies use.

The rates shown are the averages; rates may vary depending on your personal information, insurance company and state.

The sample drivers’ coverage was limited to:

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  Coverage of $100,000 per person for bodily injury.
  

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  Coverage for bodily injury of $300,000.
  

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  Property Damage Liability Coverage of $50,000 per accident
  

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  Coverage for bodily injuries caused by uninsured drivers up to $100,000 per person.
  

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  Coverage for bodily injuries caused by uninsured drivers up to $300,000.
  

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  Coverage for collisions with a $1,000 deductible.
  

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  Coverage with a $1,000 deductible.
  

Minimum additional coverages are added in states that require it.

In all of our calculations, we used a 2020 Toyota Camry L and assumed that 12,000 miles per year were driven.