They might have an incentive to compete, but I think they also have an incentive to collude. Last time I shopped around for insurance it seemed like the latter was taking place.
You're required to get homeowner's insurance if you have a mortgage, and you're required to have car insurance if you want to drive a car on public roads.
So the majority of Americans are forced to purchase at least one of these in order to live their normal lives, which makes demand inelastic.
Collusion is nearly impossible in commodity insurance (i.e. policies you can buy on a website), it’s just way too easy to detect and whistleblowers know they can make a fortune by reporting it.
It’s mostly your own governments fault if you can’t find a cheap policy, there are millions of people who will probably never have to file an insurance claim in their life making up for government decisions to insure people who wouldn’t normally be able to be insured because of poor decision making skills.
You're required to get homeowner's insurance if you have a mortgage, and you're required to have car insurance if you want to drive a car on public roads.
So the majority of Americans are forced to purchase at least one of these in order to live their normal lives, which makes demand inelastic.