82% of Americans say comparing multiple insurance quotes takes 2 hours or less, according to the newest LowCostInsurance survey.
15 minutes, like a good neighbor, could save you if you're in good hands, right? Americans are familiar with insurance companies. It's difficult to avoid insurance advertising in American media, whether it's through catchy slogans or lovable spokespeople.
Despite all of these advertisements, according to a new LowCostInsurance survey, 26 percent of Americans have never compared multiple insurance quotes, which could be costing them money. LowCostInsurance surveyed more than 1,000 American consumers to find out who is shopping around for insurance and who is saving money.
Nearly three-quarters of Americans have shopped around for insurance — and many saved money by doing so
Nearly three-quarters of Americans shop around for insurance, whether it's to protect their cars, homes, health, or pets. In fact, 74 percent of Americans have shopped around for insurance at least once, with nearly a third doing so only once.
For some customers, comparison shopping may imply obtaining the best deal on auto insurance. Others may end up overpaying for homeowners insurance because they did not shop around.
For many respondents, it was important to shop around. In fact, 76% of consumers who shopped around saved money at least once.
While more Americans (43%) report saving only some of the time compared to those who save all of the time (33%), it never hurts to look into multiple providers, regardless of the type of insurance.
How much money consumers save when they shop around — and how long it takes
Thirty percent of Americans who have shopped around say they have saved $500 or more over the course of their lives by comparing rates. Consumers who have shopped around claim to have saved the following amounts:
- Less than $100: 26%
- Between $100 and $499: 44%
- Between $500 and $999: 16%
- $1,000 or more: 14%
As it turns out, saving money may not require all that much effort. Nearly half (47%) of Americans who shopped say they spent less than an hour the last time they did so. It took more than two hours for nearly one-fifth (18%) of Americans.
According to LowCostInsurance expert Sterling Price, thirty minutes to two hours should be enough time to adequately compare plans and do deeper dives on various insurance companies.
"Spending this time will provide you with a comprehensive view of the insurance market," he says. "You'll start to notice patterns in the premiums being offered, with some insurance companies preferring certain types of drivers and health profiles over others. Finally, it will be advantageous to select the company that provides the best and cheaper premium."
Why aren’t more consumers shopping around for insurance?
Why don't all consumers take the time to see if they can save money if time and energy aren't an issue? It's referred to as brand loyalty.
It turns out that the majority of consumers (43 percent) who haven't shopped around are satisfied with their current provider or policy. Though the majority of respondents (75%) believe that shopping around can save them money, those who haven't shopped around may not believe the hype.
Surprisingly, the 25 percent of Americans who say they don't believe shopping around can save money nearly matches the 26 percent of consumers who say they've never shopped around. It's possible that some Americans share both sentiments.
When Americans would be more willing to shop around for insurance
While 33 percent of Americans say they would consider shopping around if they were dissatisfied with their current policy, the majority of consumers say the unknown is also a deterrent.
To be motivated to shop around more, half of policyholders say they would need to know they would be saving a lot of money. However, saving money is only one of the many benefits of shopping around. The prices may not change every time, but the benefits may.
"Insurance providers may provide additional benefits to policyholders," Price says. This could have an impact on policies ranging from health insurance (getting a premium discount for participating in healthy activities) to auto insurance (getting safe driving benefits for not being in an accident).
Auto insurance (43 percent) is the most popular policy for which consumers are willing to shop around for the best deal, followed by:
- Health insurance: 14%
- Homeowners or renters insurance: 14%
- Life insurance: 9%
- Dental insurance: 3%
- Pet insurance: 2%
- Travel insurance: 2%
- Tech device insurance: 1%
Furthermore, when compared to homeowners or renters, pet or life insurance, auto insurance has the highest percentage of policyholders (31 percent) who shopped around and switched providers. A quarter of policyholders in those categories report switching providers after shopping around.
Bundling insurance policies is preferred by older consumers.
When it comes to determining who bundles insurance policies, age appears to play a role. Baby boomers (ages 56 to 75) are nearly twice as likely as Generation Z (ages 18 to 24) to have multiple insurance policies with the same company.
More than half (55%) of all policyholders say they've bundled some of their policies with the same insurer, which could result in additional savings.
"The biggest advantage of bundling insurance policies is the savings," says Price. "Combining home and car insurance is the most common bundle. However, many people overlook the convenience of bundling."
When it comes to monthly premiums, consolidating bills and personal information with one company can add peace of mind. Bundling, on the other hand, may discourage some consumers from shopping around on a regular basis, which means they may not get the best deal when it comes time to renew.
"Once you've purchased a bundled policy, you'll probably just renew it year after year instead of shopping for the cheapest available," Price says. "It's more difficult to leave an insurer once you've bundled because you'll have to look for two new insurance policies."
The bottom line is that consumers should not be satisfied with their insurers if they want to get the best insurance rates. Only 17% of respondents say the need to cut costs would motivate them to shop around, but perhaps they shouldn't. Extra savings now could mean more money for emergencies or long-term investments later.
Methodology
LowCostInsurance hired Qualtrics to conduct an online survey of 1,048 Americans from March 18 to 24, 2021. The survey was conducted with a non-probability sample, and quotas were used to ensure that the sample base represented the entire population. All responses were reviewed for quality control by researchers.
In 2021, we defined generations as the following ages:
- Generation Z: 18 to 24
- Millennial: 25 to 40
- Generation X: 41 to 55
- Baby boomer: 56 to 75
While the survey included consumers from the silent generation (those aged 76 and up), the sample size was insufficient to include findings from that group in the generational breakdowns.