J.D. Power’s 2025 Auto Insurance ‘Shop-a-Palooza’: What Consumers Need to Know

2025 is being called a true “shop-a-palooza” for auto insurance, as record numbers of Americans are actively shopping for better rates and coverage. Here’s what’s driving this trend and what consumers should keep in mind:

•  More than half (57%) of auto insurance customers have shopped for a new policy in the past year, the highest rate in J.D. Power’s 19-year study history45. This surge follows years of steep premium hikes, with the average annual premium reaching $2,543 in 2024—a 26% jump from 20233.

• Market Shifts to a Buyer’s Market: After several years of insurers focusing on profitability and rate increases, 2025 marks a return to competition. Insurers are now aggressively seeking new customers and working to retain high-value clients, shifting from raising rates to offering more competitive deals and incentives12.

•  While premiums remain high, the rate of increases slowed to under 2% by late 2024, making it more feasible for shoppers to find real savings when switching45.

•  With nearly every insurer increasing rates in 2024, shoppers previously found few alternatives. In 2025, as competition heats up, more drivers are expected to switch, and insurers are rolling out new offers to attract them13.

• Bundling and Embedded Insurance: One-third of shoppers are looking to bundle auto with homeowners insurance—bundled customers tend to stay longer with their insurer (7 years vs. 5.5 for non-bundlers). There’s also growing interest (37%) in “embedded insurance” sold directly by car dealers or manufacturers, especially among younger drivers45.

• Digital Shopping Hits Record High: Nearly half of all buyers are now using online tools to compare and purchase auto insurance, making it easier than ever to shop around10.

• Usage-Based Insurance (UBI) Tipping Point: Telematics and usage-based policies are gaining traction. While only 17% of shoppers currently buy UBI, interest is rising as drivers look for personalized, potentially lower rates based on actual driving habits1.

• Customer Satisfaction Still Lags: Despite more competition, 38% of customers remain dissatisfied with their insurer, mainly due to lingering frustration over past rate hikes and service issues. Insurers are under pressure to improve customer experience and retention2.

• Interest in Dealer/Manufacturer Insurance: Younger generations and those motivated by service are increasingly open to buying insurance directly from auto dealers or manufacturers, a trend that could reshape the market45.

•  With so many offers and shifting rates, comparing quotes each year is more important than ever.

•  Bundling auto with home or renters insurance can yield better rates and longer-term benefits.

•  If you’re a safe or low-mileage driver, telematics-based insurance could save you money.

• Evaluate Service, Not Just Price: With satisfaction still lagging, consider claims handling and customer support when choosing a new insurer.

2025’s “shop-a-palooza” is a unique opportunity for consumers to find better deals and coverage. With competition intensifying, digital tools improving, and new insurance models emerging, drivers who actively compare and evaluate their options stand to benefit the most