Signs point to a stronger economy, but are consumers feeling the relief

Despite positive macroeconomic indicators, consumers do not see the benefits trickling down to them with an overwhelming majority (78%) currently rating the condition of the US economy overall as poor or fair, according to Nationwide’s 2024 Economic Impact research, released today. While Americans can recognize positive economic movement, S&P 500 increasing more than 10% since the beginning of 2024 and the Dow Jones Industrial Average crossing 40k for the first time ever—the reality does not match this activity as personal budgets remain strained. Nearly two in three consumers (64%) currently rate their financial situation as poor or fair, causing nearly half (47%) to have reviewed their current insurance policies in the past six months.  

• In 2024, only 36% of Americans gave a positive rating of their personal finances. 

 
Top financial goals: Nationwide’s survey also revealed 57% of consumers are focused on managing essential expenses and 47% paying off debt. 

Casey Kempton, Nationwide’s President of Personal Lines Insurance, noted “As consumers focus on how best to manage their finances during this uncertain economic period, an insurance agent can serve as a valuable partner to help people understand how best to manage the sometimes-delicate balance of saving money in the short term without exposing themselves to significant future financial risks.”  

Insurance premiums are a target for budget cutbacks: Most consumers expect costs to continue rising over the next year, especially cost of living expenses (69%) and housing costs (66%). The rising cost of insurance plans are also on consumers’ radars as 77% have reviewed their policy in the past six months, or plan to do so by the end of the year. Over the next six months:  

• 31% say they will look for ways to reduce premiums on existing insurance policies 
• 25% say they plan to requote their policies with a different carrier 
• 18% plan to decrease coverage on their existing policies 
   

Reducing insurance coverage might expose policyholders to unnecessary risks. Lowering coverage limits could result in larger out-of-pocket expenses in the event of an unforeseen loss. Moreover, canceling a policy completely increases vulnerability of financial ruin if a significant event were to take place.  

Deferring critical home maintenance: Housing costs appear to be impacting financial wellbeing, with 40% of homeowners who say they have delayed necessary structural repairs to their home over the past 12 months. Of individuals who have delayed performing home maintenance or necessary renovations, 69% say it costs too much and 48% say they have other financial priorities right now (such as paying off debt or other expenses). 

Other budgetary strains being made to get by: 

• Delaying big purchases (57%) 
• Searching for higher paying jobs (20%) 
• Picking up gig or secondary work (16%)  
• Reducing investments in retirement funding (12%)  

Advice for those considering cutting coverage: Work with your agent to help you understand the implications of policy changes and how they would impact your current finances. If you are looking for ways to save on your insurance, talk to an agent. Insurance is a layer of security that policyholders can rely on, especially in the face of financial uncertainty that consumers might be feeling other places.