New Car Insurance Company for Millennials | What to Look for When Searching for New Car Insurance
Written by The Clearcover Team | 5 minute read
What do Millennials look for in a new car insurance company and why do they make the switch to a new car insurance company?
Earlier this year, U.S. millennials saw big changes to their on-road travel as COVID-19 forced shelter-in-place orders and office closures. From surprising (and potentially longstanding) new traffic trends to a decrease in car sales, it quickly became clear that car travel was changing for many people. After stocking up on hand sanitizer and toilet paper, the next thing we did was wonder what a pandemic would mean for millennials and their car insurance. (As a new car insurance company offering a better customer experience, we may be a little biased in our interests…)
The pandemic has now taken over the better part of this year. Lockdowns have been lifted, and people have adjusted to a new “normal” marked by mostly nonexistent commutes, an emphasis on safety, and the resurgence of the summer road trip. With such big changes in millennials’ driving habits, we decided to ask them* how the pandemic has impacted how they see their auto coverage — and in turn, find out what they want to see from a new car insurance company.
So, what do millennials think of car insurance in the midst of COVID-19? Will the pandemic cause them to switch to a new insurance carrier? And if so, what will they be looking for in a new car insurance company?
Here’s what we found.
COVID-19 has driven a shift in what millennials find important — which could cause them to look for a new car insurance company if their current company doesn’t line up.
We know that millennials see the world differently now than before the pandemic. The things they find important in everyday life have shifted with looming fears of infection and less financial stability. We found that safety, protection and transparency have been on millennials’ minds more than usual lately — and that they’ve begun holding their insurance carriers accountable to these things, too.
Right now, safety is key.
For insurance companies that offer an in-person experience, millennials are seeking safety throughout the pandemic. In fact, millennials are watching brands closely to understand their safety procedures — and it could have big implications for brand loyalty. While only 20% of millennial respondents told us that a commitment to cleanliness impacted their loyalty to a brand pre-COVID, that number is now up to 42%. Additionally, 36% of millennials now say they want to receive communications about cleanliness and sanitation processes, and 38% now care about the availability of hand sanitizer and masks.
A global pandemic has made millennials want to protect themselves against more than just a virus.
When we asked millennials how their car insurance purchasing habits had changed since COVID-19, we found that the pandemic has made them see car insurance as a more valuable protective measure than before. A total of 53% of millennials used the pandemic as an opportunity to re-evaluate their protection and made changes to their car insurance policy. In addition, 44% of millennials said that the pandemic caused them to feel the need to protect themselves with car insurance.
This isn’t exclusive to auto insurance: 55% of millennials reported that the pandemic caused them to purchase life insurance, while 48% of them felt the need to purchase homeowners insurance.
Strapped finances mean millennials want to know what they’re paying for.
Millennials report a bleaker financial outlook now than in 2019: The number of Millennials who say they have good job security is down by 15 percentage points, and only 37% of millennials reported optimism about their financial futures (down from 57% in our 2019 survey). Additionally, 55% of millennials report that COVID-19 and the related economic crisis has made them aware of what their car insurance costs.
For millennials, it seems that financial hardship could lead to a greater awareness of the money they spend. While 81% of them felt their insurance company has been helpful in explaining the cost of their policy, while 71% said it’s confusing knowing exactly what is covered within their monthly premium.
Millennials also want better customer experiences — which might impact how they look for a new insurance company.
Shifting financial and safety priorities in the midst of COVID-19 have pushed millennials to expect better experiences from their insurance company. Now more than ever, they’re looking for ease and clarity. And for insurance companies, falling short of expectations could put them at risk of losing business and insuring undercovered policyholders.
A great customer experience (CX) still relies on a blend of automation and support with real people.
The pandemic hasn’t changed millennials’ desire for a hybrid customer experience model — but it might have made them more open to a fully digital model. In fact, 71% of respondents said they would trust a fully online insurance provider — a seven percentage point increase from last year.
Additionally, 44% of millennial respondents said they prefer a fully digital model versus customer experience interactions that offer a mix of digital and human interaction. The same number of respondents said they prefer the hybrid model.
And just in case you’re not yet convinced that a hybrid or digitally-leaning model is the way to go: 77% of respondents said they would like to see their current car insurance company offer more digital solutions.
When car insurance is too confusing, millennials sacrifice service for price — and could risk having too little coverage.
For millennials, confusion drives an alarming amount of complacency — which could be damaging for both customers and carriers. Over half of millennials admitted that because car insurance was confusing, they opted for the lowest price over the best service or coverage-to-price ratio. This is an 8 percentage point increase from 2019, which means that millennials could be more prone to research fatigue during the pandemic.
If their current car insurance carrier falls short of their expectations, millennials are not afraid to make the switch to a new car insurance company.
Not surprisingly, expectations among millennial-age insurance customers have shifted slightly in 2020 — and auto insurance companies may consider following suit to retain customers and attract new business.
What shifting expectations means for the auto insurance industry is that there may be growth opportunities for car insurance companies who are able to provide a superior customer experience. Though customer experience was important before COVID-19, we noticed that millennials place a slightly greater emphasis on technology and transparency in the midst of the pandemic. In other words, carriers that can provide those things may be able to more easily convince millennials to switch to a new insurance company given they’ve had a poor or lackluster experience with their current company.
In fact, we know that there’s a big business opportunity in millennials switching to new car insurance companies — and not just because we built our own business on that hypothesis! During COVID-19, what it comes down to is service and transparency: 77% of millennials reported they feel that car insurance companies intentionally make auto policies hard to understand, a 25 percentage point increase from 2019’s survey. Plus, 89% of this year’s millennial respondents agreed that car insurance companies should do more to make auto coverage less confusing for customers.
Given the perceived lack of transparency at a time when easy-to-understand car insurance is in demand, it won’t come as a shock that an entire third of millennial survey respondents have considered to switch to a new car insurance company during COVID-19. 87% of respondents also said they would consider switching to a new car insurance company in the future if they were clear about their policies and are competitively priced.
So, what’s the takeaway from all this data? To us, it’s that COVID-19 has, in a way, empowered millennials to expect more from their auto coverage. And higher expectations means they’re not afraid to switch to a new car insurance company if their current carrier falls short. To win millennials over, hybrid customer service, safety-first customer interactions and accessible policy information before buying will be key.
For our part, we’re giving millennials what they want by providing better, smarter auto insurance powered by technology that simplifies everything from getting a quote to filing a claim. Save time, save money — and always know what you’re paying for. That’s easier car insurance. (Don’t believe us? Put our technology to the test by clicking below to see what you’ll save.)
You don't have to wait for your current policy to expire -- switch today and start saving.
Interested in citing our data? We feel privileged for the opportunity. Visit here.
*We polled +800 U.S. residents on their summer travel plans. The survey was conducted at 95% confidence, +/- 4% margin of error.
