How Can Auto Insurers Land High-Income Households?

Insurers should seek to entice high-income households since, of course, they earn more and are likely to be in a position to spend more. But understanding exactly what makes them so valuable is important.

We found that high-income households are more likely to have multiple vehicles on their policies, they tend to remain loyal to one company, and they are usually happy with their insurer. So enticing high-income households may be a challenge, but it’s well worth it.

They insure many vehicles …

Almost half of those in high-income households have three or more vehicles covered on their personal auto insurance policies — nearly double the rate of those in the middle or low-income bracket. For insurers, that means added premiums for added vehicles.

Number of vehicles in auto policy by income range

They have lots of toys …

High earners’ portfolio of vehicles is more diverse. Upwards of 90 percent of people in each bracket have a passenger car, truck, or van insured, but high earners are much more likely to have vehicles like RVs, motorcycles, and commercial vehicles on their policies as well. That gives insurers a chance to offer policies to cover all of their toys.

Vehicle types covered in personal auto policy by income range

They love to bundle …

Along those lines, high-income households are more likely to bundle many types of coverage together. People in the higher income bracket are nearly twice as likely to say it is “very important” that they can bundle policies, and they are by far the most likely to bundle home, renters, and life insurance with their auto policies.

Percentage who bundle auto insurance with other policies by income range

They are loyal …

Just over one in four people across income brackets have been with their current carrier for a decade or more, but that number was considerably higher for high-income households.

Length of time with current auto insurer by income range

They are happy (but there’s a twist) …

All consumers stay with brands because they’re satisfied – but those in the highest income bracket are by far the most likely to say they are “extremely satisfied” with their carriers, leading us to believe that once they make a carrier decision, they’ll be hard-pressed to switch.

Satisfaction rating of current auto insurance carrier by income range

And here’s the twist: Those in high-income households say they’re happy with their auto insurance carriers, but they’re the most likely to have gotten a quote from another company in the past year — and they’re the most likely to predict they’ll get a quote in the next year from another potential insurance carrier.

Percentage of customers who got an auto insurance quote in the past year vs. those likely to get one in the next year by income range

Clearly, when high-income households are happy with their coverage, which means that for insurers, making sure these prized customers are happy is mission-critical.

More than those in the other two income brackets, high earners are much more likely to consider life changes as good moments to reevaluate their auto insurance coverage. In fact, across every life event we asked about, those in high-income households were the most likely to say they’d probably consider changing carriers.

Percentage of people “very likely” to change auto insurance carriers depending on major life event by income range

As for those who already considered changing carriers and got a quote in the past year, saving money was the biggest motivator across all income brackets. But there were a couple of notable differences. Those in the high and upper-middle income brackets were much more likely to say they got a new quote because they wanted to look at different coverage options, and they were considerably more likely to shop because their claims increased their premiums.

Reasons for getting new auto insurance quote by income range

Have we said strongly enough that insurers need to work hard to keep their existing high-wage earners in the fold? If not, let’s say it again: These customers are incredibly valuable thanks to their propensity for multi-line policies and their loyal nature. How can you keep the customers you have (and entice additional high earners to join the team)? Here’s what the data tells us:

Offer the very best price you can

Just because high-income households have more money than others doesn’t mean they’re keen to spend it if they don’t need to. High earners were only slightly less likely than those in the middle- and low-income brackets to say that saving money was their main motivator in shopping for new policies over the past year. A premium increase unrelated to claims was the third most common reason for high-income households to look for a new policy — and they did so at a higher rate than the average person.

Gear your marketing toward major life changes

More than any other income bracket, high earners are more influenced by major changes in their lives when it comes to considering changing their insurance carriers. Whether it’s getting married, having a child, aging, job changes, or other life events, high-income households see these things as potential pivot points in their auto insurance journey. In fact, it was moving to a new area rather than adding a driver or vehicle that was the single biggest life change high earners told us would make them reconsider their coverage.

Offer robust services and keep your reputation clean

Finally, more than other groups, those in high-income households care deeply about the reputation of their auto insurance carrier, and they want many ways to get in touch.

A surpassing customer service experience is much more important to high earners than those in other groups. For example, 54 percent said it’s “very important” to have live call center agents, compared to about 41 percent of all people, but they don’t just want the personal touch. They’re also the most likely to say it’s “very important” to have online claims support (52 percent vs. 40 percent for everyone).

And what you offer today is important, but so is what the company has done in the past. More than half of high earners said it was “very important” for their carriers to have a long history in the industry, and a similar percentage said it’s “very important” that the company has a high financial rating.

Let them evangelize for your brand

High-income customers are extremely valuable when it comes to spreading word-of-mouth and talking up their carriers (when they’re happy, of course). By a nearly 29-point margin, this group is likely to be a net promoter, meaning they’re more likely to say good things than bad things. This is about 10 times higher than those in the upper-middle income range, while those in the middle or lower bracket are net detractors.

About 6 million U.S. households fall under the $150,000-plus income bracket, and since one-third of them are up for grabs as auto insurance customers every year, few companies could afford to ignore the importance of this group. While they’re motivated by price like everyone else, as we’ve seen, they have unique needs that companies must address if they want to win (or keep) their business.