The rates consumers shop for car insurance has gone down to the lowest level over the previous 5 years, with only 25% of people stating that they shopped around for a new car insurance provider in the past year.
This is despite the fact that over $5 billion in advertising and marketing was spent in 2014. Since most car insurance renews every 6 months, policyholders could shop (online?) twice per year. But since the 2009 downturn, consumers have slowed their shopping for new policies.
Every car insurer promises to save shoppers $400 over the competition. So if buyers actually realize that savings, they decided they would not get much benefit from searching again in 2011 & 2012. Still some people actually get hired, move or get married and look for a new carrier.
For car insurance buyers who went online for a new policy in 2014, 43% switched providers — the highest rate since the study first began measuring retention in 2008, and an increase of 3% from 2013. Car insurers are not marketing the price savings that were not there during the insurance price wars of a few years ago.
Insurance companies are raising rates to cover claims. State filings to increase premiums have gone up. So now they are focusing on different parts of the car insurance market like motorcycle owners, or renters insurance.
I believe car insurers should focus on fundamentals within a car insurance policy, like how much car insurance drivers need. Maybe a special auto insurance deductible.
In California, around 15% of drivers are uninsured and that number is growing. That is a higher risk, but potentially profitable market. And the auto insurance agencies and providers are not competing with any old loyalty. For the most part, insurers have done a good job educating policy holders about how car insurance works, now they need to market cost savings within a policy.
Enough with the talking Geico lizards already!