Survey Reveals Most Consumers Fail to Shop Auto Insurance

August 30, 2000

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.

“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 said.

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.

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