Husband-Wife Decision Making in Purchasing and Renewing Auto Insurance

Abstract

Intrafamily decision making relative to auto insurance purchasing was examined for a U.S. sample of 1,327 families. The husband was found to be primarily responsible for making two of the more important auto insurance decisions company selection and premium payment. The wife's involvement in these decisions was found to be contingent on her contribution to the family's financial resources. A high degree of consistency was found between the family member making these two decisions. Consistency was also observed between the attitudinal measures of decision responsibility and behavioral surrogates of decision making involvement. Consideration of both family members in developing advertising and personal selling strategies in the auto insurance industry are suggested and implications for further research are discussed. Much of the literature on household purchasing behavior in insurance has sought to identify correlates of consumption or expenditures. This research has associated insurance purchasing behavior with various demographic and socioeconomic variables [ 1, 3, 10] . Household characteristics such as income, number of children, age, and total assets were found to be significant explanatory variables when associated with insurance premium expenditures and the amount of insurance purchased. Comparatively less research has dealt with intrahousehold interaction in the purchase of insurance. The differential influence of the husband and wife however, has been noted in several studies. In one insurance study, presence of the wife at the sales interview was associated with a considerably higher rate of sales [13]. In another study, it was found that the family was less likely to purchase life insurance if the husband and wife discussed the insurance purchase without the agent present [16]. While these studies dealt with household purchasing behavior for life insurance, only limited research has been conducted on husband-wife interaction in purchasing auto insurance [6, 17]. Auto insurance, however, has become a major household expenditure with a recent survey [2] showing that almost half of the insurance consumers pay in excess of $300 annually for auto insurance. During 1976, consumers paid almost $24 billion in auto insurance premiums. In addition, while life insurance is usually an optional purchase, auto insurance in a majority of states is one of the principal methods of satisfying state financial responsibility laws when operating a motor vehicle, while in several other states purchase of auto insurance is compulsory. These factors indicate the need to study the purchase of auto insurance and in particular the involvement of family members during purchase and renewal. Terry L. Childers is in the University of Wisconsin graduate school and 0. C. Ferrell is in the Department of Marketing and Management of Illinois State University.