Home and auto insurance purchases held back in second quarter, TransUnion says


A drop in auto and home sales led to lackluster buying activity for auto and home insurance in the second quarter of this year, according to a recent report from TransUnion. (iStock)

Consumers didn’t shop as much for homeowners and car insurance in the second quarter of 2022 due to lower home and auto sales, according to a recent report. TransUnion Report.

Home insurance purchases rose just 4% in the second quarter compared to the same period last year, according to the report. The increase is mainly due to activity in the southern states, where purchases increased by 12% compared to last year.

And auto insurance fell 3% in the second quarter compared to the same period last year. The largest decline in auto insurance purchases was in the high-risk consumer category, which TransUnion defined as buyers with credit scores between 300 and 500. This category saw an 11% decline in purchasing activity during the second quarter, compared to last year.

“An unusual scenario from 2022 is that there was an increase in insurance purchases at the start of the year among the most at-risk groups; however, those sales fell fairly quickly as we entered the second quarter of the year,” TransUnion reports. said. “It’s possible that some of this buying activity earlier in the year was driven by the wave of tax refunds.”

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Car insurance purchases decline as purchases decline

New and used car sales fell 3.7% and 17%, respectively, in May, according to TransUnion. And the used-car market is currently on course to end the year with sales down more than 12% from the 40.6 million recorded in 2021, according to Cox Automotive.

Lower sales volumes are a big reason why auto insurance buying activity slowed in the second quarter, TransUnion said. With fewer auto purchases, consumers had less reason to shop around for new insurance.

Most of the auto insurance buying activity in the second quarter was instead driven by those looking for cheaper rates, according to the report. This trend is expected to drive buying activity for the remainder of 2022 as buyers face increased insurance rates and high auto prices that impact sales volume.

“Even with the influx of consumers purchasing their auto insurance as premiums rise due to industry-wide rate increases, this cannot overcome the suppressed purchase rates we are seeing among consumers who don’t buy new cars, creating a purchase event,” Michelle Jackson, senior director of property and casualty insurance, TransUnion’s insurance business, said.

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Potential rebound in home insurance purchases possible, report says

On the home insurance side, rising mortgage rates have marginalized homebuyers and limited mortgage refinancing options, reducing the reason to shop around for insurance.

A recent report by ATTOM showed that lenders issued $807.8 billion worth of mortgages in the second quarter of 2022, and a total of 2.39 million mortgages were taken out. This figure was down 40% from the second quarter of 2021.

Home insurance purchases in the second quarter were largely driven by migration activity to southern states, according to the TransUnion report.

“We are still seeing an interest in moving to sunnier environments, which has led to an increase in home insurance purchases in states such as Florida and Texas, which ironically are more weather-prone states. extremes and more expensive insurance,” Jackson said. . “However, housing market consumers are increasingly facing headwinds from rising mortgage interest rates and housing costs, which have tempered the rate of purchases and refis, and as a result, insurance purchases.

However, there are indications that homebuyers may return to the market, creating more opportunities for insurance shopping activity. A recent TransUnion Consumer Pulse Survey said 32% of consumers plan to apply for a mortgage in the next year, an increase of 4% from last year. Among respondents, Millennials led all generations at 40%.

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