As more consumers shop for auto insurance, despite rates falling as 2024 progressed, a growing number say they’re interested in embedded policies from auto dealers or automakers.

The J.D. Power research, conducted from April 2024 through this past January, found that 37% of nearly 13,000 survey respondents say they’re interested in embedded insurance. 

The growing interest is most prevalent among generations Y and Z and – 47% – and those desiring service – 48%, J.D. Power said.

The development may not bode well for the traditional insurance industry, said J.D. Power Managing Director of Insurance Business Intelligence Stephen Crewdson.

Auto insurance rates were up 13% as 2024 got under way, but the inflated prices fell through the months to end the year up under 2%, according to J.D. Power data.

The upward push nevertheless moved many consumers to shop around to try to get less expensive policies last year, 57%, for the highest rate in the study’s 19-year history. 

“As rate activity began to fall in the second half of 2024, many shoppers were successful at finding lower-priced policies,” Crewdson said in a report on its research.

“That combination of increased shopping and less rate taking created a bit of a snowball effect for much of the year, but we are seeing signs that shopping rates are starting to normalize.”

Other trends J.D. Power observed in its research include more insurers offering telematics-based programs this year that tie rates to safety and mileage, though the 17% rate is down from 22% in 2023. A third of consumers shopping for auto insurance want to bundle it with homeowner’s coverage.

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