CarInsurance.com’s 2025 State of Car Insurance
With premiums projected to increase, many drivers say they’re looking for ways to save money on their coverage.
Download report
Scott Nyerges
Executive Editor
Scott Nyerges is an insurance expert who writes and edits for QuinStreet’s CarInsurance.com, Insurance.com and Insure.com. He is a former senior editor and content strategist at U.S. News & World Report, where he led coverage of car insurance and other personal insurance lines. He also served as a managing editor for Consumer Reports and a news programmer for MSN.
Laura Longero
Executive Editor
Laura is an award-winning editor with experience in content and communications covering auto insurance and personal finance. She has written for several media outlets, including the USA Today Network. She most recently worked in the public sector for the Nevada Department of Transportation.
Consumers in 2025 are pessimistic about the price of insurance coverage, and with good reason. Nearly 78% of participants in our most recent CarInsurance.com survey said their rates increased by at least 5% in the past 12 months. Some drivers saw their rates rise by 30% or more.
The survey results are a sign that insurance consumers are feeling battered. Premiums nationwide rose by double-digit percentages in 2023 and 2024 as insurers raised rates to offset inflation and other factors, including a surge in post-pandemic accidents.
Rates are expected to increase again in 2025 – albeit at a slower rate than the last couple of years – as regulators in many states recently approved rate hikes while others raised mandatory minimum insurance limits. Meanwhile, tariffs on imports from America’s major trading partners will put added pressure on the price of cars and car parts, which carriers will eventually pass to policyholders.
During the past two years, auto insurance prices have jumped about 35%, according to the U.S. Bureau of Labor Statistics’ tracking of urban consumers’ spending.
In late March, CarInsurance.com commissioned market research firm Dynata to conduct an online survey of 1,460 drivers, asking them about the cost of car insurance, whether their rates have increased and what they’re doing about it.
Of those surveyed, nearly 19% said they’ve sought ways to save money by canceling a policy or changing their coverage. With future rate increases likely – even if they’re not as extreme as in years past, as experts predict – it’s a safe bet that more drivers will be motivated this year to reduce their auto insurance rates however they can.
This report examines the state of auto insurance from the consumer’s perspective. To create the report, CarInsurance.com – which has been helping consumers find the best car insurance coverage since 2003 – interviewed several state officials, carrier representatives, academic experts and insurance agents about the industry trends they see in 2025.
In addition, we compared 53 million insurance quotes from 170 regional and national insurance carriers across 29,152 cities and 34,588 ZIP codes nationwide.
Key takeaways
- Rates are still rising, but at a slower pace.
The Insurance Information Institute projects premiums will rise by 7% in 2025, which is less than the double-digit increases drivers experienced in 2023 and 2024. - Premiums are going up – but not in all states.
In Florida, regulators have approved rate decreases of up to 10% for some carriers. But California officials have OK’d increases of up to 7% for some insurers. - Tariffs will affect rates down the road.
Surcharges on imports will lead to higher prices for new cars and replacement parts. Insurers will eventually pass this along to customers through higher premiums, according to the American Property Casualty Insurance Association. - Most drivers are looking for ways to save.
More than 75% of survey respondents said they have tried to lower their insurance costs, with 34% actively seeking cheaper coverage. - Price is the main reason people shop around.
More than 67% of respondents say a rate increase prompted them to switch. - But relatively few switch carriers.
Only about 15% of those who shopped for cheaper coverage say they changed insurers.
The 2025 car insurance industry outlook is uncertain
Insider perspectives on rising premiums, repair costs, tariffs, and AI-driven pricing.
Car insurance prices will continue to increase in 2025.
But the double-digit percentage increases that hit drivers in 2023 and ’24 should be a thing of the past.
“The Insurance Information Institute’s underwriting projection forecasts a countrywide average personal auto rate increase of 7% in 2025,” said Mark Friedlander, senior director of media relations for the Triple-I, an industry research and education organization. “We expect to see the industry’s underwriting performance improve this year as premiums catch up with accident loss costs.”
However, rates won’t rise uniformly across the country. Although premiums may rise in some states, they may hold steady or even decline in others.
Related expenses are increasing, too.
The cost of vehicle repairs, replacement parts and labor – all of which contribute to the price of car insurance – is expected to increase this year.
“Our projected average premium increase in 2025 includes a 3.8% spike in the costs of repairs,” which includes both parts and labor, Friedlander said.
Car repairs are becoming more time-consuming, too.
Technology like blind spot detection, for instance, requires sophisticated sensors embedded in car parts like side-view mirrors. Repairing or replacing such a part involves not just installation but calibration of the sensors as well.
“As vehicle complexity continues to grow, the rising number of replacement parts and labor hours per repair may further impact the repair industry. Repairers will likely need to manage more intricate, time-consuming repair processes, driving up costs and potentially extending cycle times,” said Kyle Krumlauf, director of industry analytics at CCC Intelligent Solutions, a data and research firm specializing in the property and casualty insurance industry.
President Trump’s tariffs could lead to increased insurance rates.
Consumers probably won’t feel the immediate effects of the 25% tariff imposed in March on steel and aluminum goods and the sweeping tariffs of 10% or more on most trading partners announced in April. But sooner or later, manufacturers will pass those costs along to insurers in the form of higher repair and replacement prices and insurers, in turn, will pass that on to customers.
“While tariffs would influence insurance rates, consumers would not see the immediate effects. For example, if the tariff goes into effect on auto parts tomorrow, it would take a while for those increased costs to impact premiums, so it’s likely that policyholders wouldn’t see an impact from the tariffs on their insurance bill for 12 to 18 months,” said Bob Passmore, department vice president of personal lines at the American Property Casualty Insurance Association, a national trade association representing home, auto and business insurers.
One potential bright spot is artificial intelligence, experts say.
Many insurance companies already use AI chatbots to assist customers with simple queries and predictive analytics systems to root out fraud. But that’s not all, said Zack Pope of David Pope Insurance in Union, Missouri.
“AI models for insurance rates will likely improve, which may be able to more fairly distribute premiums to risk profiles,” he said. “Companies may also require the use of [telematics] to feed their AI models and more accurately charge customers.”
Insurers are also using AI to streamline the claims process, analyze accident photos to assess damage, estimate repair costs and even detect fraud by identifying doctored images and patterns of suspicious claims activity.
The past few years have been hard on consumers
Rates skyrocketed as insurers scrambled to recoup losses in the wake of the COVID-19 pandemic, as drivers returned en masse to roads, accident rates skyrocketed and inflation drove up prices for cars, parts and repair and labor.
In 2022 alone, the car insurance industry had a combined ratio of 112, which means that for every dollar collected in premiums, insurers paid $1.12 in claims and expenses. It was the worst year for underwriting in decades.
Car insurance premiums spiked between 2022 and 2024.
According to the U.S. Bureau of Labor Statistics, the average cost of car insurance rose 7.9% year over year in 2022. The following year, rates shot up by 17.4% YOY and in 2024, they increased by 17.8% YOY.
As of April 2025, car insurance prices are up 6.4% year over year.
Consumers have responded by shopping around for car insurance more than before. According to data and analytics firm LexisNexis, nearly half (45%) of policyholders had shopped insurers for cheaper rates by the end of 2024. Consumers aged 66 and older were the most likely to shop around.
Why drivers are switching insurance providers
Drivers are switching companies due to price, customer service and poor claims handling. We surveyed 1,460 people, asking them about the cost of car insurance. Online market research company Dynata conducted the survey.
Not surprisingly, almost 19% of drivers surveyed said they’ve taken steps to lower their rates. This can range from dropping optional coverage like rental reimbursement to adjusting coverage limits to canceling a policy.
Among the key findings:
Most drivers are paying more for car insurance.
- About 46% of people said their premiums increased by 5-10%.
- More than 21% saw rates rise by 11-20%.
- About 11% of drivers said their rates have increased by more than 20%.
Although many drivers shop around for coverage, few make the switch.
- 13% of those surveyed have changed insurers within the past 12 months.
Price is the main reason why people are switching car insurance providers.
- About 80% of drivers who switched say they found a cheaper premium.
- About 9% cite poor customer service or poor claims handling.
Surprisingly, most drivers are satisfied with how their insurer handled their claims
- 88% of those surveyed say they were pleased with how quickly their claim was handled.
- About 33% say their claim was resolved within two weeks.
- 27% say their claim was settled within four weeks.
Insurers eye tariffs, repair costs
Insurance company representatives we spoke with declined to speculate about whether carriers would raise rates this year.
Insurers are paying attention to the effect tariffs may have on their bottom line in 2025 and beyond, however.
“The price of imported automotive replacement parts will increase with the new tariffs, resulting in an increased cost to repair vehicles. Companies will need to increase premiums to pay for the higher repair costs,” said Kevin Quinn, vice president of auto claims for Mercury Insurance.
Carriers are mindful of consumer behavior
According to data from LexisNexis’ quarterly Insurance Demand Meter, fewer drivers were shopping around for insurance in the first quarter of 2025 than in the final quarter of 2024. However, the study notes that search volume is rising again as more drivers shop around for insurance. Two things are behind this trend. First, many people have income tax refunds to spend. Second, more people are buying cars as fears of tariff-driven price increases loom.
The report authors note that older drivers and longtime customers have been among the most active when it comes to shopping for and switching insurers in 2025. Insurers have taken notice.
“As the rate increases start to slow down, carriers are offsetting that decline by further investing in marketing efforts to attract those high-tenured consumers who have not shopped for auto insurance in many years,” said Chris Rice, vice president of strategic business intelligence, LexisNexis Risk Solutions.
One common refrain we heard from insurers: If you’re unhappy with your rate, speak to your agent. There may be discounts or programs like telematics, which monitor your driving and reward good habits with savings.
“At the end of the day, the thing that drivers can control is how they drive. When people exhibit safer driving habits, it results in less accidents across the state, which can lead to lower premiums,” said Kelly Hernandez, Nationwide’s associate vice president of telematics at Nationwide.
Insurers are filing for rate changes while regulators review, approve, or deny them. Outcomes vary widely, with some states seeing increases, others stability, and a few noting declines. Where you live can significantly affect how much you pay for coverage. Car insurance is regulated at the state level and each state does it differently. In California, one of the most heavily regulated states, drivers insured by some of the biggest carriers could see rates go up by almost 7%. But in Florida, where drivers pay some of the most expensive average premiums in the U.S., rates may go down as three of the largest carriers filed for decreases of up to 10%. It’s a similar picture in less-populated states. Regulators in North Carolina, for example, are considering a request from insurers to raise rates by more than 20%. But in nearby Tennessee, the state OK’d rate decreases for several insurers. In February, insurers in North Carolina requested a 22.6% blanket increase in car insurance premiums. The North Carolina Rate Bureau (NCRB), which coordinates rate increase requests between insurers and state regulators, has 60 days to gather public comment and review the request, said Jason Tyson, director of communications for the North Carolina Department of Insurance. Tyson said North Carolina has historically rejected or significantly reduced these requests. In 2023, the NCRB requested a 28.4% increase, but after negotiations, the final approved rate hike was 9% spread over two years. Given past trends, Tyson said, “the 2025 increase is expected to be significantly lower than the 22.6% requested.” North Carolina drivers aren’t the only ones who will probably see higher premiums. In California, where the state’s Department of Insurance (DOI) reviews carrier rate increases on a rolling basis, a handful of insurers have received approval to raise their car insurance premiums so far in 2025. Rate increases have been approved for CSAA Insurance Group (AAA), 6.2%; Farmers, 4.06%; and Wawanesa, 6.9%. Other carriers may file for rate increases as the year progresses. A representative from the California DOI was unavailable for comment. In February, Florida Gov. Ron DeSantis announced that GEICO, Progressive and State Farm have filed for rate reductions of 10.5%, 8.1% and 6%, respectively. In a press release, the governor’s office attributed this to 2023 tort reform legislation. Like many states, Tennessee drivers have seen their car insurance rates increase during the past few years due to factors such as supply-chain issues for replacement parts, an increase in crashes and more severe crashes, among other factors, said Kevin Walters, a Tennessee Department of Commerce and Insurance (TDCI) spokesperson. But things may be looking up. “TDCI has received and/or approved of decreases for several major carriers since July 2024,” Walters said. “The decreases are the result of factor and rate methodology revisions along with favorable recent claims experience. While any decrease is a win for consumers, they are generally much less than the increases those same companies implemented over the past two years. That said, we are hopeful that these decreases become a trend.” And in New York, pending legislation in the state Senate could sway rates if approved. New York Senate Bill S4224 would establish a state office of public insurance advocate. This office would review insurance rate filings, push back on unjustified rate hikes, participate in hearings and educate the public. In addition to regulating rates, state insurance departments compile and resolve consumer complaints about their insurers. Some people lodge complaints about premiums, but other issues also matter. “Some of the top auto insurance complaints DIFS receives involve claim handling, customer service, policy or rating questions,” said Chelsea Lewis, director of communications at the Michigan Department of Insurance and Financial Services (DIFS). Good claims handling is particularly important, according to J.D. Power. The market research firm conducts an annual survey of car insurance policyholders who have filed claims, asking about their experiences and rating insurers based on those responses. “The claims process is the moment of truth for auto insurance customers, so when they experience rate increases and then have a claim with longer-than-expected repair times and other inconveniences, their overall trust in the brand is greatly diminished,” Mark Garrett, director of global insurance intelligence at J.D. Power, said in a press release. Although exact figures vary, representatives we spoke with said complaint rates are mostly holding steady or have risen only slightly compared to past years. “We saw a slight uptick in automobile complaints with 1,850 automobile complaints received in 2023 and 1,914 complaints received in 2024,” said Delaney Trail, a communications specialist with the Colorado Department of Insurance. California raised its minimum liability insurance
requirements to 30/60/15. This translates to $30,000 in bodily injury
coverage per person, $60,000 in bodily injury coverage per incident and $15,000 in
property damage coverage per accident. Before Jan. 1, California drivers only needed
liability coverage of 15/30/5. Utah increased its minimum coverage levels to
30/65/25. Prior to Jan. 1, when the new law took effect, Utah drivers were
required to have at least 25/65/15 in liability coverage. In Virginia, minimum coverage requirements increased to
50/100/25 from 30/60/20 for policies issued or renewed on or after Jan. 1.
On July 1, North Carolina is increasing its
requirements for minimum coverage to 50/100/50. That’s a significant
increase from the previous mandate of 30/60/25 in liability coverage. Mandatory minimum
coverage for uninsured motorist insurance is also increasing. Drivers must carry bodily
injury liability coverage of at least 50/100 in 2025. On July 1, Massachusetts will raise its mandatory
minimum coverage limits to 25/50/30. Previously, drivers had to have
minimum liability insurance of 20/40/5. The state’s personal injury protection
(PIP) coverage limit remains unchanged at $8,000. California raised its minimum liability insurance
requirements to 30/60/15.This translates to $30,000 in bodily injury coverage
per person, $60,000 in bodily injury coverage per incident and $15,000 in property damage
coverage per accident. Before Jan. 1, California drivers only needed liability coverage of
15/30/5. Utah increased its minimum coverage levels to
30/65/25. Prior to Jan. 1, when the new law took effect, Utah drivers were
required to have at least 25/65/15 in liability coverage. In Virginia, minimum coverage requirements increased to
50/100/25 from 30/60/20 for policies issued or renewed on or after Jan. 1. On July 1, North Carolina is increasing its requirements
for minimum coverage to 50/100/50. That’s a significant increase from the
previous mandate of 30/60/25 in liability coverage. Mandatory minimum coverage for uninsured
motorist insurance is also increasing. Drivers must carry bodily injury liability coverage
of at least 50/100 in 2025. On July 1, Massachusetts will raise its mandatory minimum
coverage limits to 25/50/30. Previously, drivers had to have minimum liability
insurance of 20/40/5. The state’s personal injury protection (PIP) coverage limit
remains unchanged at $8,000. Experts say several factors are to blame for
increasing car insurance costs, including the rising cost of vehicle repairs and replacement parts, an
increase in the severity of claims filed, the number of miles driven returning to pre-pandemic levels,
and the impact of climate events like hail, hurricanes, or floods.
“Auto rates are rising. However, it shouldn’t be as steep as the previous years as
underwriter profits are starting to catch up to the losses [of the recent past],” said Clayton
Fisher, an agent with Blue Marlin Insurance in Homestead, Florida. “Litigation of insurance claims
is a major driving factor, but so is the increase in electric vehicles, which are more expensive to
repair and replace than gasoline-powered vehicles.” Read more A full-coverage car insurance policy now costs $1,895 per year ($158/month) on average. The price of car insurance increased by 6.4% year over year in April 2025, according to the Bureau of Labor Statistics. That’s on top of a 17.8% increase YOY from 2023 to 2024 and a 17.4% increase YOY from 2022 to 2023. However, the rate of increase has slowed markedly in the past few months. Read more The cost of car insurance depends on many factors, starting with the carrier you choose. As our analysis shows, the price of a full coverage auto insurance policy can vary greatly between insurers. There’s nearly a $1,000 difference between what the cheapest and most expensive carriers charge on average for the same type of policy. Nationwide has the cheapest car insurance. You can expect to pay an average of $1,548 per year or $129 per month for a full coverage policy. Allstate is the most expensive insurer, charging an average of $2,509 annually or $209 monthly for coverage USAA’s rates are cheaper still. However, because USAA only sells to its members (active and retired military and their families), we do not include it in our overall analysis. 16-year-olds pay an average of $7,149 per year or $596 monthly, and rates remain stubbornly high through the teenage years. An 18-year-old may pay $5,249 per year or $437 per month. Rates will slowly decline in the coming years. 25-year-olds pay $2,259 per year or $188 monthly. Once drivers pass age 25, their rates will decline regularly as long as they drive safely. By age 40, annual rates have dropped to $1,895 annually or $158 monthly. Rates will continue to decline over the next two decades. 60-year-old drivers pay the least: $1,717 annually or $143 per month. From here, some drivers will see premiums inch upward. A 70-year-old may pay $1,841 per year or $153 per month. As drivers age and risk increases, rates begin to rise more notably. Drivers with a clean record pay the least: $1,895 annually or $158 monthly. If your vehicle is damaged in an accident and the claim is more than $2,000, your average rate will increase to $2,241 annually or $187 monthly. One speeding ticket can raise that average to $2,401 annually or $200 monthly for driving up to 10 mph over the limit. You’ll pay $2,960 per year or $247 monthly for a single-vehicle accident involving only your vehicle. An at-fault accident involving more than $2,000 worth of property damage will raise your premium to $2,969 per year or $247 monthly. One at-fault accident with an injury can raise that average to $3,093 annually or $258 monthly. One DUI ticket can raise your rate to $3,849 annually or $321 monthly. In all but a handful of states, insurance companies can consider your credit history when calculating rates. If you’ve been careless with your finances – failing to pay bills on time, missing loan payments, and the like – it will be reflected in your credit score. If your credit is less than pristine, you’ll pay more for car insurance. Drivers with good credit pay $1,895 annually or $158 monthly for full coverage car insurance. Drivers with fair credit pay $2,425 per year or $202 per month. Drivers with poor credit pay $4,126 per year or $344 per month. The type of vehicle you drive can make a big difference in how much you pay for coverage. Generally speaking, the more you pay for a vehicle and the less common it is, the more it will cost to insure. SUVs cost $1,935 per year or $161 per month for full coverage, making them, on average, some of the cheapest to insure. Minivan drivers pay $1,956 annually or $163 monthly for insurance. Sedans cost $2,120 per year or $177 per month, but if you choose a luxury or hybrid model, you could spend more for coverage. Truck owners pay $2,152 annually or $179 monthly. Read more See where premiums are highest and lowest across the country Car insurance can be expensive. But there are ways you can mitigate the cost. Drivers should brace themselves for continued rate increases in 2025. Vehicle prices are rising, as are replacement parts and labor costs. Litigation expenses, extreme weather and state regulations are putting added financial pressure on insurers’ bottom lines. To top it off, President Trump’s steep tariffs on the nation’s trading partners all but promise future costs that will eventually be passed along to drivers. Consumers will have to work hard to find cheap car insurance. Start by reviewing your current policy and look for ways to save by dropping optional coverages or adjusting your deductible. If you can’t find any savings, talk to your agent or company rep. If you still aren’t satisfied, you’ll need to comparison shop and that could mean getting quotes from a half-dozen carriers or more before you find a deal. We interviewed state officials, insurance industry representatives, academic experts, and independent agents to understand the key trends shaping auto insurance in 2025, supported by analysis of millions of real-world quotes. All sources accessed in May 2025. Please contact Scott Nyerges, CarInsurance.com editor and the author of this report.How insurers and regulators are driving state-level shifts
2025 changes to state car insurance laws
California
January 1, 2025
15/30/5
30/60/15
Utah
January 1, 2025
25/65/15
30/60/25
Virginia
January 1, 2025
30/60/20
50/100/25
North Carolina
July 1, 2025
30/60/25
50/100/50
Massachusetts
July 1, 2025
20/40/5
25/50/30
California
January 1, 2025
15/30/5
30/60/15
Utah
January 1, 2025
25/65/15
30/60/25
Virginia
January 1, 2025
30/60/20
50/100/25
North Carolina
July 1, 2025
30/60/25
50/100/50
Massachusetts
July 1, 2025
20/40/5
25/50/30
Analyzing the cost of car insurance in 2025
Cost of car insurance in 2025: Nationwide trends
Cost of car insurance in 2025 by company
Cost of car insurance in 2025 by age
Cost of car insurance in 2025 by driving record
Cost of car insurance in 2025 by credit history
Cost of car insurance in 2025 by vehicle type
Cost of car insurance in 2025 by state
*Please select valid state
Tips for saving money on car insurance in 2025
Bundling your auto and home, condo or renters policies – one of the most common ways to save – can cut your bill by 20% or more.
Raising your deductible on coverage like comprehensive and collision insurance from $500 to $1,000 could result in a 10% discount.
Agreeing to have your driving monitored in exchange for potentially lower rates could drop your rates by 10% or more.
Make sure your driving record is spotless. If not, take a defensive driving course to not only save a bit on insurance but also remove points from your record in some states.
Pay bills on time, avoid missed payments, and reduce debt. This will improve your credit score and can lead to cheaper insurance rates.
Even if you’re happy with your current insurer, reviewing your policy and comparing rates from other providers regularly ensures you’re not overpaying.
Final thoughts on car insurance in 2025
How we created this report
Resources & references
For more information about this report or to schedule an interview