Bracing for the worst may be a quintessential trait of millennials, a generation shaped by 9/11 and the Great Recession. The COVID-19 pandemic now has those money-conscious millennials rethinking their car insurance plans.
According to a new survey from Clearcover, a Chicago-based car insurance company, 2020’s outbreak has millennials feeling less optimistic about their financial future, and changing their insurance policies as a result.
Only 37% of millennials are optimistic about their financial future
Compared to pre-pandemic sentiments, there was a 20% drop in millennials that felt optimistic about their finances, the Clearcover survey indicated.
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Ariana Gibson, Head of Driver Insights at Clearcover, told us this is the biggest takeaway from their survey, “Prior to COVID-19, more than half of those surveyed were feeling optimistic about their finances, career outlook, and making strong progress towards reaching their financial goals.”
73% of millennials made changes to their auto insurance policies due to COVID-19
With office closures, travel restrictions and few in-person entertainment options — Americans are driving much less during the pandemic. Household miles driven fell by around 70% in March alone, and insurers started offering refunds and reduced premiums in the spring. Despite help provided by the nation’s largest insurers, more permanent changes are warranted for long-term COVID-19 lifestyle changes.
According to the Clearcover report, auto insurance was the top sector to face the most policy changes. “The single biggest impact COVID-19 has had on the insurance industry is the amount of attention being paid to it now that people are in financially tenuous situations. Before the pandemic, many thought of car insurance as a ‘set it and forget it’ type product. With millions suddenly forced to consider ways to cut spending in the wake of the pandemic, people have begun looking more closely at their insurance policies,” says Gibson.
Other areas of insurance are gaining attention too. 55% of respondents reported getting life insurance policies for the first time. Gibson adds, “This is a clear sign that COVID-19 has millennials thinking about various means of protecting themselves and their assets.”
Millennials are thriving in an all-digital marketplace
The digital-native generation already prefers contactless interactions, and digital COVID-19 safety measures work in their favor. Millennials generally prefer insurance companies who have moved a majority of their process online.
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Gibson says, “The most unique difference between how millennials approach insurance compared to older generations is that millennials prefer less to no human contact, whether they’re shopping for a policy or filing a claim.”
In fact, 71% of millennials surveyed in the study said they would trust a fully online insurance provider, a 7% increase from the company’s 2019 study. “Older generations surveyed were 18% less likely to share this sentiment,” Gibson adds.
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