How many of your low-mileage drivers are shopping around for a better deal?

One impact of the pandemic has been a large spike in customers who are shopping around for a better deal because they are not driving very much, LowestRates.ca reports.

“Consumers don’t understand why different insurance companies are reacting differently to the COVID-19 pandemic,” Justin Thouin, CEO of LowestRates.ca, told Canadian Underwriter recently. For example, he said, consumers don’t understand “why some of them [insurers] are giving instantaneous discounts, why some of them are giving discounts only when driving situations have changed, and why some are keeping prices flat for the next year.”

Thouin was commenting on changes in motorists’ driving habits due to the widespread closures that started this past March after COVID-19 was declared a pandemic.

LowestRates.ca delivers sales leads to brokers and direct writers from people who are shopping online for home and auto insurance. The firm recently released some insights from its own data on patterns in consumers’ shopping behaviour.

In particular, the number of low-mileage drivers getting quotes on LowestRates.ca was up 34.21% in May of 2020, compared to May of 2019. The company defines low mileage as 5,000 km a year or less.

“In March, overall, we saw a large decline in quotes because of uncertainty around COVID-19,” Thouin said. “This was not just in auto insurance, but for all financial products on our site. Once that uncertainty wore off, we started to see more and more drivers with low mileage quoting on our site. We have not seen this in the past, so we can rule out seasonality.”

Typically, low-mileage drivers can benefit from lower insurance rates because premiums are based on risk, says Thouin. “From an insurance company’s perspective, the less you drive your car, the lower the risk of you getting into an accident and needing to make a claim.”

In a separate survey, InsuranceHotline.com asked motorists whether their insurance company offered them any financial relief during the COVID-19 pandemic. Nearly two thirds (64%) said no while 25% said yes.

In the InsuranceHotline.com poll conducted in May, motorists were asked how they rated their level of satisfaction with the financial relief measures they were offered. One-third were satisfied, 15% preferred not to answer, and 52% said they were not satisfied.

After things go back to normal, consumers will still go online more than they used to and see what types of insurance they can get and how much it costs, said LowestRates.ca’s Thouin.

“Consumers have more time than they did before. They are more cognizant of the money they are spending on everything. And insurance is a large percentage of what people spend each year. So we are seeing a lot more people go online to make sure that they have the right coverage at the right price.”