Effect of Prevention Focus on the Relationships Among Driving Accident History, Risk Perception, and Consumers’ Automobile Insurance Coverage Decisions

Abstract

The primary aim of our research was to examine the moderating role of prevention focus (PRE) and the mediating role of risk perception (RP) on the relationship between driving accident history (DAH) and insurance coverage (IC) decisions to test this moderated mediation mechanism. We collected survey data from 808 newly eligible voluntary automobile liability insurance policyholders in Taiwan and analyzed the data using PROCESS macro. The estimated results showed that PRE moderated the indirect effect of DAH on IC through RP. In general, a worse DAH would increase the RP of people who were high prevention-focused, thereby increasing their willingness to purchase a higher IC. Conversely, a worse DAH would not increase the RP of people who were low prevention-focused, and such people would not increase or would even decrease their IC. The results provide an explanation for the inconsistent paths from DAH to IC in the literature. From a marketing perspective of psychographic segmentation, our research helps insurance companies to determine what types of consumers they should pay more attention to and to formulate marketing strategies. JEL: D91 G52 E21