More Americans are looking to unbundle their home and auto insurance to find cheaper alternatives than ever before, according to a recent report from J.D. Power.
Auto insurance costs surged 14.5% in February, growing two times faster than inflation's 6% rise. The search for cheaper insurance is why 42% of survey participants said they shopped for new plans, and 41% noted it was because their rate had increased by 20% or more.
Usage-Based Plans vs. Bundling
For decades, bundling auto and homeowners insurance has been appealing to consumers as it offered cost savings. The recent surge in prices in auto insurance, however, is forcing many to consider usage-based insurance (UBI) instead.
Homeowners Insurance Search Increases Too
A recent TransUnion report has shown that shopping homeowners insurance has increased as well, likely due to the unbundling surge. Many homeowners have felt that if they are looking for new auto coverage, they should see if there are lower costs on their homeowners as well.
TransUnion also anticipates that more homeowners will look to unlock cash from their homes to finance renovations, resulting in a 24% rise in equity origination. This poses a challenge to insurance companies if these homeowners don't report the improvements.
No Need to Search for New Coverage with Mutual Assurance
Mutual Assurance members don't need to shop for their homeowners insurance as they already know they cannot get the same coverage for less from any other provider. The Society's low annual assessment rate, currently set at 22%, means savings averaging 50% less than other insurance providers.
This offers another advantage to our members as they don't need to consider the riskier UBI auto coverage as the savings they receive from Mutual offsets increases in their auto coverage.
Sources: Forbes, Fox Business, WSJ