Most Consumers Fail to Shop Around When It Comes To Auto Insurance
30 August 2000
National Survey Reveals That Most Consumers Fail to Shop Around When It Comes To Auto Insurance
GREEN BAY, Wis., Aug. 30 While most Americans believe it's
smart to shop around when purchasing high-ticket items, few actually do so
when it comes to auto insurance, one of the leading annual expenses in most
household budgets. Most Americans are also surprised to learn that with a
little comparison shopping, they could save thousands of dollars over a
lifetime just by shopping around for car insurance providers.
That's according to a national survey recently conducted by the American
Express Property Casualty companies, the auto and home insurance division of
American Express.
According to the survey, only 32 percent, or roughly one-third, of the
population comparison-shops for auto insurance when their premiums come due.
Yet, 64 percent of Americans surveyed said they shop around when purchasing a
new car, 61 percent when buying an electronic item like a cell phone or DVD
player, and 42 percent when they're in the market for a new household
appliance, like a lawn mower or a microwave oven.
"The average annual cost of car insurance is higher than a lot of other
major purchases regularly made by consumers," says Marc Weiner of the
Marketing Risk Management Group, Inc., the Chicago-based research firm that
conducted the survey. "Considering the savings that can be realized over a
year and the thousands of dollars that can be saved over a lifetime by
shopping around, it's surprising that consumers don't exhibit the same type of
shopping habits when it comes to auto insurance."
According to Vanessa Vanderveren Marin, Vice President of Marketing for
the American Express Property Casualty companies, most people don't stop to
think about the savings they may be missing. "A lot of people are paying more
than they need to for car insurance," Vanderveren Marin says. "Those people
who do shop around are literally amazed at the difference in rates from one
insurer to the next."
Even more curious is the correlation between the amount of time spent
competitive shopping for high-ticket items, including auto insurance, and the
actual dollar savings realized. The survey yielded the following results:
Item Shopped Average Amount of Average Dollar
Time Spent Amount Saved
Competitive Shopping After Shopping Around
Transportation items
(e.g., car, boat,
motorcycle) 29 days $2,851
Auto Insurance 5 days $301/year
Electronic items
(e.g., cell phone,
CD player) 13 days $203
Household items
(e.g., lawnmower,
refrigerator,
microwave oven) 4 days $119
"In theory, the greater the possible savings, the more time consumers
typically dedicate to shopping around," says Weiner. "For some reason, that
theory goes right out the window when it comes to car insurance." Weiner says
that consumer buying habits regarding car insurance are even more
extraordinary when you take into account that it's a major purchase made every
year, not every five to ten years like some purchases. "By not shopping
around, a lot of consumers are missing the opportunity to save significant
dollars each and every year," Weiner says.
To alert consumers to the possibility of these lifetime savings, the
American Express Property Casualty companies, headquartered in Green Bay,
launched their first-ever advertising campaign last June in Wisconsin.
A significant rate reduction announced earlier this year provided the
impetus for the campaign, designed to tell Wisconsin drivers about the dollar
savings they can realize if they buy their insurance directly from a provider,
such as the American Express Property Casualty companies, rather than going
through an agent.