Survey: Why are so many drivers frustrated with shopping for auto insurance?

Americans are increasingly frustrated with paying for auto insurance determined by traditional factors like credit scores and demographic characteristics, such as age or gender, rather than their actual driving habits.

That message was clear in newly released Arity research, which revealed a common theme among drivers: Traditional pricing methods often feel disconnected from how they drive.

To better understand the challenges faced when shopping for auto insurance, Arity surveyed 1,000 U.S. drivers whose characteristics could make insurance access more difficult, such as lapsed coverage, traffic violations, or low credit scores.

Our findings show that drivers are eager for a more accurate, transparent approach. In fact, more than half of respondents say they want insurers to use real-world driving behavior data to ensure policy premiums accurately reflect their habits on the road. 

What did we learn about drivers’ experiences? Here are three key takeaways:

1. Drivers feel unfairly judged and penalized by auto insurers

The current auto insurance market often lacks transparency when it comes to pricing — and it’s eroding consumer trust and satisfaction.

Insurers may rely too heavily on driver demographics and traditional risk proxies to write policies, without the visibility to accurately segment, price, and retain the drivers most likely to be valuable, long-term customers.

At the same time, drivers feel confused about how their rates are determined, with an overwhelming feeling that auto insurance is stacked against them. Seven in 10 respondents say they’ve felt unfairly judged or stereotyped by auto insurers when shopping for a policy. 

For many drivers, the rates they see while shopping for coverage are often based on broad assumptions, which can feel disconnected from their actual driving habits, especially when those quotes are based on external factors rather than how they drive day to day.

Those negative assumptions can feel pertinent for drivers who already have one or more risk factors. More than half (54%) feel like they’re having to pay more due to non-driving factors like low credit scores, and 28% believe they’ve been treated differently based on their age, gender, or other personal characteristics.

These perceptions are driving skepticism about auto insurance overall, with 82% of respondents saying they believe rates are designed to benefit insurers, not drivers like them.

Top misconceptions negatively impacting drivers with one or more risk factors 

1. Having to pay more because of factors that have nothing to do with my driving skills, like a low credit score 54%
2. Assumptions that I’m not financially reliable and may struggle to pay premiums 32%
3. Being treated differently because of my age, gender, or other personal characteristics 28%
4. Being labeled as a “bad driver” despite a safe driving record 24%
5. Assumptions that I’m more likely to file claims 21%

2. Many drivers aren’t paying premiums based on how they actually drive

Traditional proxies like credit scores, insurance history, and accident records have long played a role in underwriting auto insurance policies. However, these indicators don’t always provide a complete picture of a driver’s current habits or their potential to be safe and reliable in the future.

Drivers feel the disconnect: 71% of respondents said their current auto insurance policy doesn’t reflect their actual driving behavior.

The result? Many drivers end up with policies that feel costly and don’t fully reflect their actual risk on the road. In fact, 67% of respondents cite high premiums and costs as their biggest frustration when shopping for insurance.

These challenges can make the process feel unclear. Without visibility into how pricing decisions are made, it’s no wonder 42% of respondents say they’re unsure whether they’re getting the best possible rate.

Biggest frustrations when shopping for auto insurance 

1. High premiums/costs that don’t reflect my actual driving behavior 67%
2. Uncertainty about whether I’m getting the best rate available 42%
3. Being required to pay a higher upfront cost to start my policy 35%
4. Feeling penalized for past auto incidents despite maintaining a clean driving record recently 29%
5. Limited coverage options based on factors beyond my control 27%

3. Most drivers want more equitable pricing, but many don’t trust how data is used

Driving behavior data has the power to make auto insurance fairer and more accurate. However, many drivers remain hesitant to share their information with insurers, for a variety of reasons:

• 52% of respondents don’t trust insurers’ data privacy and security.
• 44% fear data will be used by insurers to raise premiums.
• 44% worry that data will be shared with third parties without their consent.

At the same time, our findings show that drivers are increasingly open to sharing their data if they understand how it can benefit them. In fact, the majority of respondents say they’d opt in if it helped them save money, earn rewards, or receive more accurate, behavior-based pricing.

How insurance providers should use driving behavior data to improve customer experiences 

1. To access rewards and discounts for safe driving habits 53%
2. To ensure my driving habits are accurately reflected in my policy premiums 51%
3. To make insurance pricing fairer and reduce inequities among drivers 49%
4. To gain a better understanding of my own driving habits and improve them over time 33%
5. To help secure or maintain a new policy 33%
6. To recommend strategies or tools for safer driving 17%

For drivers to willingly share their data, insurers will need to build greater trust and transparency around what data is collected, applied, and protected, as well as the tangible ways it can help improve pricing.

That starts with education, which is why we’re introducing the Arity driving score report: a clear, user-friendly preview of a person’s driving score before they enroll in a usage-based insurance program.

Much like credit reporting tools, the Arity driving score report will empower drivers to better understand how their driving behavior is measured, how it may influence their insurance pricing, and what they can do to improve their driving on the road.

By empowering consumers with a better understanding of their data, insurers can build trust and increase participation in their telematics program.

A smarter, more transparent future for auto insurance 

Drivers are telling us loud and clear that they want greater accuracy, transparency, and control — and they’re open to sharing their data, if it can deliver those benefits.

That’s a gap that insurance carriers can fill.

By using mobility insights to guide pricing, insurers have a powerful opportunity to strengthen trust and give drivers confidence that their premiums reflect their actual driving habits rather than generalized assumptions about similar groups.

That’s where Arity comes in. With over two trillion miles of driving behavior data collected from trusted sources, Arity helps auto insurers segment, price, and retain insurance customers with greater accuracy, sophistication, and transparency.

Our telematics solutions enable insurers to:

• Identify, attract, and bid for customers with the greatest lifetime value
• Enhance segmentation and pricing sophistication at the time of quote, with behavior data solutions tuned to your company’s unique risk profile
• Foster trust and transparency by offering policyholders a clear and fair way to demonstrate their driving habits, leading to improved retention and greater long-term value

It’s time to build data-driven auto insurance that works better for everyone. Learn how Arity can help you build a more accurate, transparent system and grow your customer base.

Methodology 

In 2025, Arity surveyed 1,000 U.S. drivers ages 18+ with a valid U.S. driver’s license about their experiences and challenges when shopping for auto insurance. Respondents had characteristics or past experiences — such as lapsed coverage, traffic violations, or low credit scores — that may impact their ability to access auto insurance.