When it comes to auto insurance, myths abound. From thinking that “no-fault” means “not my fault,” to the belief that car color determines premiums, to who is responsible when a friend borrows your car, it seems there is no shortage of myths that consumers may accept as true. But what about insurance carriers’ beliefs about consumers, especially around shopping behaviors?

Consumers are shopping for auto insurance now more than ever, and carriers have made it easier for them with improvements in technology. As a carrier, you want to stay ahead of the competition, but you may not have the complete picture of why your policyholders may – or may not – be shopping their insurance.

LexisNexis® Risk Solutions recently surveyed more than 2,000 U.S. auto policyholders to learn more about their shopping behaviors and intentions. Respondents were segmented into three groups – Recent Non-Shoppers, those who had not shopped their auto insurance in the last year; Shoppers, those who had shopped their auto insurance in the last year and Switchers, respondents who had not only shopped their auto insurance in the last year but had also switched carriers. Here are some interesting facts from our findings to help you see past the myths.

MYTH: Consumers believe they can only switch car insurers during their policy renewal period.

FACT: According to LexisNexis research, 72% of consumers are aware they can switch their insurance at any time.

Thanks to the vast amount of information available via the internet, consumers know that there is little downside to shopping their auto insurance policies at any time, even in the middle of their policy cycle.

Our research shows that consumers are quite well-informed about the terms in their policies, including the ability to cancel at any time.

MYTH: Most auto insurance policyholders don’t review their new policies when they receive a renewal notice.

FACT: The majority of Shoppers review both price and coverage before renewing. Recent Non-shoppers? Not so much.

As I mentioned above, consumers – including shoppers – are well aware of what’s in their policies. Half of the shoppers we surveyed told us that they shop their policies if they think they’re paying too much. But, they also told us that they carefully review their policies before renewing with the same insurer, and typically renew within 30 days of getting their renewal notice. How does this compare with Recent Non-shoppers? Non-shoppers are less likely to review their policies and more likely to immediately renew.

MYTH: Only lower income earners switch their auto policies for a cheaper option, and only if the savings are significant.

FACT: Insurance savings don’t appeal only to lower income earners. In fact, 28% of survey respondents who switch carriers to save $100 or less earn between $100,000 and $150,000 per year.

Myriad reasons are given for why consumers will shop their auto policies, but one of the primary reasons to switch or stay comes down to price. Price was also the top reason survey respondents gave for renewing; they didn’t find a better value with another carrier.

MYTH: Loyal and satisfied customers will always renew their policies.

FACT: The majority of Shoppers (72%) say they are satisfied with their current carrier.

Customer loyalty is a fickle thing. Consumers may claim to be loyal people, but that doesn’t mean they will always be so. In fact, 50% of Shoppers say they will probably shop their policies again within a year, and some of them expect to switch carriers. Life events that occur during a policy cycle can have an effect on renewals. Buying a new car or a home can motivate customers to reassess their insurance needs.

MYTH: Insurance carriers have no way of knowing who is a Shopper, and who is a Recent Non-Shopper.

FACT: A proactive insights-based approach can help notify insurers of changes that could prompt customers to shop their policies.

As consumers experience change in their lives, their insurance needs change too, leading to shopping for new coverage – and a new carrier. To stay competitive, carriers must be aware of what is happening within their book of business so they can stay close to those policyholders they wish to keep, know when they shop and actively engage with them.

Insurance shopping has shown no sign of slowing down. By implementing data-driven solutions to monitor and anticipate key events in your customers’ lives, you can stay ahead of the competition and help boost your retention rates.

For more information, and to read about key findings from our consumer research, download the 2019 Consumer Study Results of U.S. Auto Insurance Shopping Behavior white paper.

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