Polly: 84% of Millennials and Gen Z want embedded insurance options

Polly's 2025 Embedded Auto Insurance Study findings reveal that though the cost of vehicle ownership is at an all-time high, market stability is on the horizon and new consumer trends are emerging. For  participants who were surveyed, the most important factors in purchasing a vehicle are its safety at 75% and the overall cost at 71%, as Polly found in previous studies.

What differs in the most recent study is the cost of insurance – 62% of consumers said this was the most important factor in buying a new car over the vehicle design, auto brand or latest technology. In the press release statement, Mike Burgiss, Polly chief marketing officer, said the findings "highlight a paradigm shift in car buying, where consumers prioritize total cost of ownership and in-dealership convenience over brand and tech."

Because of record high premiums, 2025 is predicted to be a highly active year for auto shopping. According to a Jerry survey, 80% of consumers think that car insurance is currently unaffordable for the average person, and of those who shopped, most were younger people. More than half, 64% of Gen Z and 67% of Millennials, shopped for lower rates.

The Polly study highlights that embedded insurance options are popular among these groups; 84% of Millennials and Gen Z want insurance included in their vehicle purchase, 73% would purchase additional coverage to save money and 54% said they had a better experience when embedded options were offered at the dealership.

Gen Z and Millennials, who the report notes have grown up in an era of inflation and student debt, are opting for "cheap and easy" insurance coverage. Lower premiums are the likeliest factor to influence auto insurance shopping and switching, followed by the opportunity for more coverage options, better customer service, the ease of switching carriers and by recommendations from friends or family. 

Polly found that respondents over the age of 45 are also price conscious, with 75% shopping for lower premiums.

Polly suggests that embedded insurance is "essential" to dealership loyalty and satisfaction. According to the study, 90% of younger buyers already use embedded insurance products, and members of these generations are digital natives that prefer a seamless digital shopping experience. Consumer awareness increased in 2024 by 7% for Gen Z and Millennials.

"The expansion of embedded auto insurance product reach combined with rising rate increases signals that we are in for a market battling for customer stickiness in the auto insurance sector," said Vigitesh Tewary, practice director of the Everest Group. "We have seen that for most carriers, auto insurance products are the way to acquire new policyholders; but challenges such as low satisfaction rates and low digital adoption across the purchase and claims experience can lead to significant challenges in policy renewals."

Tewary added, "As we see increased competition from nimble, smaller technology-led firms and/or directly from manufacturers (such as Tesla) in select jurisdictions, carriers will have to invest aggressively in technology-led solutions across the policy sales-to-settlements experience and product innovations (EV coverage, usage-based insurance) in order to keep up with demand shifts in the market."

The Polly survey was fielded between September 25-30, 2024 and asked 1,023 American adults, who purchased a vehicle within the past 12 months, about purchasing experiences and expectations. First-party and third-party data and analytics are also included in the study.