Rising Demand for Better Auto Rates Fuels Growth in Usage-Based Insurance

In 2025, auto insurance shopping reached unprecedented levels as consumers, faced with years of rising insurance rates, began exploring their options. According to J.D. Power, a significant shift in consumer behavior is evident, with many finding better prices elsewhere.

The data reveals that 57% of customers shopped for auto insurance in 2025, a notable increase from 49% in 2024. Among these shoppers, approximately 30% decided to switch insurers, highlighting a growing trend of consumers seeking more competitive rates.

Additionally, nearly half of all buyers are now making their purchases online. The J.D. Power 2025 U.S. Auto Insurance Study indicates that customers who initiate their interactions with insurers through mobile apps report a more seamless experience compared to those who use traditional methods like phone calls or in-person meetings with agents.

“The better digital experience customers have with their insurer, the more likely they are to keep using digital channels,” stated J.D. Power. “When customers have an excellent digital experience, 92% say they definitely will use digital channels in the future.”

Looking ahead to 2026, J.D. Power notes that usage-based insurance (UBI) is gaining traction once again. Currently, only 17% of insurers offer UBI programs, but this option is becoming increasingly appealing to consumers looking to save on premiums. However, insurers are still working to refine the UBI formula to meet customer expectations.

Interestingly, while insurers prefer collecting data via mobile apps, this method tends to yield lower customer satisfaction. Many consumers favor data collection through vehicle systems, onboard computers, or devices installed directly in their vehicles.

“UBI is often used to entice customers to save money on their premiums, and with so many customers shopping their policies, this is an easy way to offer a reduced price. However, customers will only find this attractive if they trust the data that is collected. Done properly, insurers can use UBI to lower premiums, attract and retain clientele, and build loyalty in the process,” J.D. Power emphasized.

Topics
Trends
Auto
Pricing Trends

In 2025, auto insurance shopping reached unprecedented levels as consumers, faced with years of rising insurance rates, began exploring their options. According to J.D. Power, a significant shift in consumer behavior is evident, with many finding better prices elsewhere.

The data reveals that 57% of customers shopped for auto insurance in 2025, a notable increase from 49% in 2024. Among these shoppers, approximately 30% decided to switch insurers, highlighting a growing trend of consumers seeking more competitive rates.

Additionally, nearly half of all buyers are now making their purchases online. The J.D. Power 2025 U.S. Auto Insurance Study indicates that customers who initiate their interactions with insurers through mobile apps report a more seamless experience compared to those who use traditional methods like phone calls or in-person meetings with agents.

“The better digital experience customers have with their insurer, the more likely they are to keep using digital channels,” stated J.D. Power. “When customers have an excellent digital experience, 92% say they definitely will use digital channels in the future.”

Looking ahead to 2026, J.D. Power notes that usage-based insurance (UBI) is gaining traction once again. Currently, only 17% of insurers offer UBI programs, but this option is becoming increasingly appealing to consumers looking to save on premiums. However, insurers are still working to refine the UBI formula to meet customer expectations.

Interestingly, while insurers prefer collecting data via mobile apps, this method tends to yield lower customer satisfaction. Many consumers favor data collection through vehicle systems, onboard computers, or devices installed directly in their vehicles.

“UBI is often used to entice customers to save money on their premiums, and with so many customers shopping their policies, this is an easy way to offer a reduced price. However, customers will only find this attractive if they trust the data that is collected. Done properly, insurers can use UBI to lower premiums, attract and retain clientele, and build loyalty in the process,” J.D. Power emphasized.

Topics
Trends
Auto
Pricing Trends