The insurance retention challenge: Why customers shop around and switch

Auto insurance switching increased in the third quarter of 2026 even as shopping held steady year over year, according to a new report from JD Power and TransUnion. Separate consumer research found that price was a reason cited by most policyholders who switched insurers.

The auto insurance shopping rate was 13.2% in the third quarter, unchanged from a year earlier. The switching rate reached 5.1%, up 0.6 percentage points year over year, according to the JD Power Signals Intelligence for Personal Lines Insurance Quarterly Report.

Shopping and switching both increased 0.6 percentage points from the second quarter.

Stephen Crewdson, managing director of insurance business intelligence at JD Power, said consumers are still dealing with the effects of several years of auto insurance rate increases.

“Consumers are still recovering from three years of historic rate increases on their auto insurance policies, and these policies are now a part of the overall affordability crisis affecting many households,” Crewdson said.

He said shopping has remained elevated even as rate increases have cooled, with switching increasing this year.

Price remains a factor

A separate survey from LexisNexis Risk Solutions examined why consumers shop for auto insurance and change companies.

The survey of 3,000 U.S. auto insurance consumers, released Oct. 22, found that 86% of those who switched insurers cited price as a reason. Among consumers who shopped for insurance, 72% said they were open to changing insurers, according to the LexisNexis study.

Among consumers who shopped and switched within the past year, 89% said they would likely shop again if their rates increased. Ninety-six percent said they would likely change carriers if rates rose.

The survey also examined bundled policies. Forty percent of consumers with bundled auto coverage said they were open to or specifically looking to unbundle when shopping.

High-value customers are shopping

JD Power also segments auto insurance customers into high-, medium- and low-value groups. The classifications consider factors such as how long customers remain with an insurer, their risk profiles and the number of policies they hold, Crewdson said.

Switching increased more among medium- and low-value customers, while shopping increased among high-value customers, he said.

Crewdson said customer satisfaction historically increases when insurance markets soften, followed by an improvement in loyalty. That pattern has not yet emerged.

“However, loyalty has not yet responded per the normal pattern,” he said.

JD Power will continue monitoring customer satisfaction into 2027, Crewdson said.

He said insurers will need to determine which customer segments they most want to retain and focus their efforts on those groups.

“It will be too expensive for most insurers to attempt to retain all segments of the book,” he said.

Home and renters trends differ

Shopping and switching rates also changed in homeowners and renters insurance, according to the JD Power report.

The homeowners insurance shopping rate reached 7.7% in the third quarter, up 1.1 percentage points year over year. The switching rate was 3%, up 0.2 percentage points from the same quarter in 2025.

Renters insurance shopping reached 6.5%, up 0.1 percentage points year over year. Switching was 3.9%, down 1.1 percentage points from a year earlier, despite increasing 0.5 percentage points from the second quarter.

Crewdson said the homeowners market has not softened as much as auto insurance. Shopping trends indicate consumers are interested in finding lower premiums, while switching remains more difficult, he said.

He said switching in home and renters insurance could increase if those markets follow auto insurance trends as rate activity continues to cool.

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Noah Lopez is editorial assistant for InsuranceNewsNet. Contact him at noah.lopez@innfeedback.com.