Auto insurance rates in the U.S. have been on a rollercoaster ride, but recent trends show a slowdown in price increases. By the end of 2024, the growth in auto insurance premiums dropped to less than 2%, a significant decline from the staggering 13% rise seen at the beginning of the year. This shift has prompted more drivers to shop around for better deals, with the percentage of customers looking for new insurance climbing to 57%, up from 49% the previous year.
According to the J.D. Power 2025 U.S. Insurance Shopping Study, the first quarter of 2024 saw auto insurance rates reach their highest levels in decades. This surge pushed many consumers into the market, eager to find lower-priced options as the year progressed. The study highlights that the current shopping rate is the highest recorded in the study’s 19-year history. As rates began to stabilize in the latter half of 2024, many shoppers successfully found more affordable policies.
Stephen Crewdson, managing director of insurance business intelligence at J.D. Power, noted that the combination of increasing shopping activity and slowing price hikes created a “snowball effect” for much of the year. However, he cautioned that shopping rates are beginning to normalize.
A significant number of shoppers, about one-third, are looking to save money by bundling their auto insurance with homeowner’s policies. This strategy benefits insurers, as bundled customers tend to stay with their providers longer—averaging seven years compared to 5.5 years for those who do not bundle.
Another trend is the growing interest in embedded insurance, which is offered directly through auto dealers or manufacturers. Over one-third of auto insurance customers express interest in these options, especially among younger generations. This interest is particularly strong among those who prioritize customer service when shopping for insurance.
Additionally, many drivers believe their safe driving habits could lead to lower rates. In 2024, 17% of insurers offered usage-based insurance (UBI) programs, which use telematics to monitor driving behavior. This is an increase from 15% in 2024 but a decrease from 22% in 2023.
In terms of customer satisfaction, Erie Insurance ranked highest for the second consecutive year in providing a satisfying purchasing experience, followed closely by ACG (AAA) and State Farm.
The J.D. Power study gathered insights from over 12,700 insurance customers who sought auto insurance quotes in the past six months. Conducted from April 2024 to January 2025, it provides valuable data on consumer behavior in the insurance market. As more drivers seek better deals, the landscape of auto insurance continues to evolve.