Are US Car Owners Not Smart about Auto Insurance?

Car insurance companies are investing alarming amounts to advertise their products, but it turns out that all those ads fell into deaf ears. A recent study conducted for found that the average American car owner is loyal to their carriers and hasn’t switched in 12 years – all these despite insurers spending millions of dollars in advertising.

Loyal for a Decade

Some 25% of auto insurance policyholders stick to their carriers for up to 12 years, and only 30% say they compare quotes every few years. The rest don’t find the need to compare quotes and shop around for better rates. Analysts say the lethargy among US insurance consumers cost them lots of money. Non-shopping for insurance since the 1990s means consumers are unaware of the substantial price fluctuations and their effects on personal finance.

Ignore Insurance Ads


Carriers aren’t getting the best bang for their buck. Based on an SNL Financial study, both insurers Allstate and State Farm spent nearly a billion dollars in 2014 to promote their auto insurance products. If carriers are spending this much and only a third of US drivers trying to check them out in a few years time, that’s definitely like throwing money into the furnace.

Lazy Shoppers


The study reveals how lazy or unaware American drivers are on the financial impact of comparing different auto insurance policies. Amidst the increasing usage of the Internet and the aggressive advertising strategies of carriers, car owners simply don’t bother shopping for the best rates.

Uninformed about Switches


Nearly half of the survey respondents admit they don’t know about the prospects of switching carriers at any given time, with corresponding charges and reimbursements. Analysts found that many senior citizens are the least likely to make inquiries and shop around for alternative insurance deals. In JD Power’s annual Insurance Shopping Study, drivers who switch carriers could save about $400 on premiums each year.

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