CarInsurance.com Insights
- Nearly two-thirds of drivers surveyed saw rate increases in the past 12 months — most commonly in the 5%-10% range.
- General inflation remains the dominant explanation drivers give for rising premiums, cited by nearly 74% of those who saw an increase.
- Despite rate hikes, 87% of drivers did not switch insurers in the past year.
Car insurance premiums surged dramatically between 2022 and 2024, driven by pandemic-related supply chain disruptions, catastrophic natural disasters, urban theft and increased lawsuits.
The good news: The worst of those increases appears to be behind us.
The bad news: Premiums remain significantly higher than pre-pandemic levels, and affordability is still a genuine challenge for millions of American drivers.
The nationwide average full coverage is now $2,539 annually, according to CarInsurance.com data — up dramatically from $1,127 just a few years ago. While the rate of increase has slowed considerably, drivers in high-risk categories and high-cost states continue to feel the squeeze.
Learn why car insurance rates remain elevated and what you can do to lower your premiums.
Are consumers switching insurers, and if so, why?
In our 2026 car insurance consumer survey of 1,510 drivers, nearly two-thirds of drivers saw their rates increase in the past 12 months. The most common experience was a 5–10% hike, reported by nearly 28% of respondents. Here’s the full breakdown:
- No increase: 37%
- Increased less than 5%: 24%
- Increased 5–10%: 28%
- Increased 11–20%: 8%
- Increased 21–30%: 2%
- Increased more than 30%: 2%
Car insurance rates have risen nationally over the past several years. The amount you pay, however, continues to fluctuate based on personal factors — where you live, your driving history and what you drive.
Drivers mostly attribute higher premiums to inflation
So, what do consumers think is contributing to their car insurance spikes? Among those who saw an increase, general inflation was by far the leading explanation — cited by nearly 74% of respondents. Other contributing factors included:
- Insurer looking to increase its profits: 31%
- Replacement parts/repair costs are more expensive: 27%
- Increased severity of weather events: 16%
The repair cost concern is well-founded. The cost of vehicle repairs and maintenance increased by more than 36% between 2021 and 2025, with bodywork and repair labor costs each rising by over 13%. Drivers attributing their rate increases to parts and repair costs are closer to the truth than they may realize.
Most drivers aren’t shopping for new policies
With elevated costs, finding ways to save becomes a top priority. One of the easiest ways to find a lower monthly premium is by shopping for a new policy. However, according to survey respondents, most have not switched their insurance provider in the past 12 months — 87% stayed put. Only 13% switched carriers in the past year.
The No. 1 reason people switched was finding a cheaper premium, cited by 74% of those who changed carriers. Other reasons included bad customer service experiences (7%), moving to a state where their former insurer didn’t operate (6%) and being dropped or non-renewed by their former insurer (6%).
A note on shopping frequency: While comparing rates regularly is still a smart move, experts now caution against switching too often. Insurers may view frequent switchers as less desirable customers, which can affect underwriting. Shopping every one to two years — or when you experience a significant life change or sharp rate increase — is now the more widely recommended approach.
Are people canceling their car insurance coverage?
After several years of car insurance rate hikes, it’s easy to presume most consumers would be making major changes to their coverage. While most drivers are holding onto their current coverage, a meaningful share did make changes in the past year due to cost. Our survey found the following.
Have you canceled or changed your auto insurance policy in the past 12 months due to the cost?
| No, I have not canceled or changed my coverage in the past 12 months | 83.5% |
| Canceled my policy | 4.5% |
| Increased my deductible | 4.1% |
| Dropped optional coverages (e.g., rental car reimbursement) | 3.1% |
| Lowered my liability limits | 2.9% |
| Dropped collision or comprehensive | 1.9% |
What’s driving auto insurance rate hikes?
In 2022, the average annual insurance premium was $1,127, according to a trend report by the Insurance Research Council (IRC). In 2025, the average rate was $2,539 per year — more than double. So, what’s driving the rate hikes?
“Average rates are moderating because premium increases over the past two years are catching up with insurer loss costs,” says Mark Friedlander, senior director of media relations for the Insurance Information Institute (Triple-I). “Common factors impacting the cost of auto insurance across the U.S. include more expensive repairs for more technologically advanced vehicles, inflationary impacts on auto parts and labor, and an escalation in litigated claims due to billboard attorneys aggressively marketing their services to consumers, encouraging them to have a lawyer handle their claim instead of filing it with their insurer.”
Additionally, severe weather events and climate risks, such as those from wildfires, severe thunderstorms, floods and hurricanes, have impacted the cost of car insurance. In 2025, weather and climate disasters cost more than $100 billion without a hurricane in the calendar year — reaching that level for the fifth time in the past six years, according to the New York Times. Costs accrued from weather-related events show no signs of slowing.
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The affordability gap: Who’s hit the hardest?
C.L. Fife, a 75-year-old driver in Nevada, says she’s seen a continuous uptick in her insurance rates over the past year, from $105 to $185 — a nearly 80% increase. She says she has heard from friends that their rates have also been steadily increasing.
She’s been at a loss as to why her rates have risen, especially as a retired, safe driver who has her policy bundled with her home insurance policy and receives a 15% discount from her insurer’s monitoring discount program.
The average annual rate for full coverage in Nevada is $3,963, compared to the nationwide average of $2,539 for a full coverage policy. Nevada’s rates have increased dramatically and in the past year, the state has become one of the 10 most expensive states in the nation for car insurance.
This scenario isn’t just specific to Nevada; some drivers are seeing even higher rates, primarily those who are considered high-risk or those who opt for state-minimum coverage.
How can drivers save money on car insurance in 2026?
Navigating car insurance rate hikes can be challenging, causing confusion and frustration about what to do next. In general, drivers can work on reducing rate increases with a few strategic tactics. The following are some key ways to work on lowering rate increases:
- Shop and compare policies regularly. Comparing rates from multiple insurers remains one of the most effective ways to lower your premium. Experts recommend shopping every one to two years, or whenever you experience a significant life change or a sharp rate increase. Avoid switching too frequently, as insurers may view that behavior less favorably at underwriting.
- Consider telematics or usage-based insurance. If you are comfortable with monitoring your driving behaviors — including how often you speed, brake and how frequently you drive — telematics programs can deliver real savings. Our survey found that 63% of drivers would allow their insurer to track their driving in exchange for a discount, and industry data confirms that safe drivers can save up to 30% through these programs. If you’re not racking up many miles, a usage-based insurance policy may help cut costs.
- Raise deductibles, adjust coverage as needed. Higher deductibles mean a lower monthly payment. While this is a good option when funds are tight, remember that in an accident, you’ll likely face significant out-of-pocket expenses. If you carry a high deductible, chat with your insurer about what other coverage options you could add for increased protection, and keep savings for emergencies.
- Maximize available discounts. Car insurance companies provide discounts for various drivers, such as good/safe drivers, low-mileage and good students. These discount programs can save 10–15% on average. Bundling options — home, auto and life, for example — can also help keep premiums more affordable.
It’s important to note that if you’re a high-risk driver, it may take time before your rates begin to decrease, but a reduction is possible over time with good driving behaviors, adding coverages and participating in a driver’s safety course (though this may not be available from all insurers or in all states). Maintaining a clean driving record for three to five years is essential — ideally, longer.
Policy and industry outlook: What’s on the horizon?
The rate environment in 2026 is more mixed than it has been in recent years. The national average increase is expected to stay well below 1% — the smallest year-over-year rise since 2022 — and more than half of states are projected to see rate decreases. However, high-cost states including Nevada, California, New York and New Jersey are still expected to see meaningful increases at renewal.
While the future is uncertain, it can be beneficial to consider what may be coming in order to make a plan that fits your needs and budget.
Federal and state-sponsored low-income car insurance programs
Car insurance rates vary significantly from state to state, and that variation creates real hardship in high-cost markets. Individuals and families can seek low-income car insurance options offered through government-sponsored or state-run programs.
California’s Low Cost Auto (CLCA) Insurance Program, for example, is a state-sponsored, affordable, liability-only coverage car insurance program for eligible residents. Typically, an individual’s household income for one person must be $39,125 or less to qualify. Through this coverage option, some drivers can find coverage that isn’t impacted as much by rate volatility.
AI and insurtech’s impact on car insurance
Smart vehicles have changed the driving landscape. The convenience of having a car that connects to your tech and navigation and maintains safety features while driving is a modern-day luxury that aims to improve overall driving performance. It also maintains and stores your driving data, which insurance companies use to assess risk and set rates.
Artificial Intelligence (AI) and Insurance Tech (InsurTech), such as telematics devices, chatbots and pricing data analytics, are used to track driving for discounts, and can offer more accurate quotes/customized policies and provide some customer service support. AI may be used in underwriting and sophisticated premium assessments in the future.
Tariffs and other potential pricing impacts
As tariffs are implemented, there are likely to be more supply chain impacts, which have created a stir related to future vehicle and parts costs. With heightened concerns over economic impacts, inflation and recessionary elements, many industry experts have shared their concerns about additional cost spikes.
“The situation regarding how tariffs could impact future rates continues to fluctuate,” Friedlander says.
A stabilizing market — but not an affordable one
Car insurance rates surged dramatically between 2022 and 2024, and the worst of that cycle now appears to be over. The rate of growth has slowed to near zero nationally, and many drivers are beginning to see modest relief at renewal.
But stabilization is not the same as affordability. At $2,539 per year on average, full coverage insurance remains far more expensive than it was before the pandemic — and our 2026 survey confirms that most drivers are still feeling the pinch. Nearly two-thirds saw their premiums rise in the past year, and nearly three-quarters of those who did pointed to general inflation as the primary cause.
Those in higher-risk groups and higher-cost states continue to bear the heaviest burden. For everyone else, the best path forward remains the same: Shop strategically, explore telematics discounts, maximize bundling and maintain a clean driving record over time.
Resources & Methodology
Sources
- California.gov. “California’s low cost auto.” Accessed March 2026.
- Insurance Research Council. “Personal Auto Insurance Affordability: Countrywide Trends and State Comparisons.” Accessed March 2026.
- National Association of Insurance Commissioners. “Artificial Intelligence.” Accessed March 2026.
- New York Times. “Even Without Hurricanes, U.S. Disaster Costs Surpassed $100 Billion Last Year.” Accessed March 2026.
Methodology
CarInsurance.com commissioned Dynata in March 2026 to field a survey asking 1,510 people about their insurance products, 1,415 of whom reported having auto insurance. CarInsurance.com commissioned Quadrant Information Services to get car insurance rates. The rates are based on the sample profiles of 40-year-old male and female drivers carrying full coverage policies with limits of 100/300/100 and $500 collision and comprehensive deductibles. Read the detailed methodology for more information.
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