Auto insurance premiums have increased during the past decade, but there’s good news for some drivers in 2025 — rates are finally stabilizing. Several large insurance companies announced that they’ll lower premiums in Florida, one of the nation’s most expensive states for car insurance. Other states are attempting to pass legislation that would reduce premiums.
Here’s what you need to know about auto insurance rates in the second half of 2025.
CarInsurance.com Insights
- Three major car insurance companies have announced statewide rate reductions in Florida for 2025: GEICO, Progressive and State Farm.
- In New Jersey, the Car Insurance Reduction Act would restrict certain underwriting factors, like credit history and occupation, and require insurers to offer premium reductions for people who drive safely.
- Louisiana Gov. Jeff Landry signed several bills earlier this year to reduce auto insurance premiums.
Recent trends show a slowdown in premium increases
If you have a car insurance policy, you’ve probably noticed your premium slowly increasing over time. Data from the U.S. Bureau of Labor Statistics (BLS) shows that car insurance prices have increased nearly every year since 2015. Rates briefly dropped during the COVID-19 pandemic in 2020, but rebounded and have trended upward since then.
In 2025, however, car insurance premiums could finally be coming down in some states. While you probably won’t see a dramatic drop in premiums this year, several factors suggest that rates could ease for many Americans.
A few national insurers have exceeded their underwriting profit expectations in recent years, allowing them to reduce rates slightly. Legislation to reduce car insurance premiums has also led insurers to lower prices in some states.
Major insurers announce rate reductions in select states
In February, three major car insurance companies announced statewide rate reductions in Florida for 2025: GEICO, Progressive and State Farm. GEICO will lower rates by 10.5%, Progressive will lower rates by 8.1%, and State Farm will lower rates by 6%.
Louisiana Gov. Jeff Landry signed several bills in late May to reduce auto insurance premiums in the Pelican State. Under the new laws, the state’s insurance commissioner is given more authority to reject rate filings deemed excessive and limit personal injury litigation, easing rates for Louisianans.
In New Jersey, the Car Insurance Reduction Act would restrict the use of certain underwriting factors, like credit history and occupation, and require insurers to offer premium reductions for people who drive safely. The pending legislation would also increase price transparency by giving drivers a detailed explanation for how their premium was calculated.
Improved insurer underwriting profits contribute to rate stability
One of the driving factors behind auto insurance rate stabilization in 2025 is improved underwriting profits for insurers. Several insurance companies, like Allstate and Progressive, have reported significant underwriting income increases.
According to Insurance Business, Allstate’s profits increased by 259% during the first three quarters of 2024, mainly due to changes to claims handling and operational efficiency. Progressive’s profits increased by 220%.
One of the main reasons Allstate could get back to target profitability levels was rate increases over the last few years. So, while Allstate customers may see their rates decrease in 2025, this comes after many consecutive years of rate bumps.
Another factor is reduced claim frequency and costs. When insurance companies spend less money settling claims, they retain more profit and can bring down rates. On the other hand, when insurers spend large amounts of money on claims, they often need to raise rates to remain financially stable.
Florida’s insurance reforms led to market stabilization
While car insurance premiums could ease nationwide in 2025, Florida is leading the charge.
In 2023, Governor Ron DeSantis signed a bill that reduced fraudulent windshield repair claims and allowed drivers with comprehensive insurance to get free windshield replacements. Since the bill became law, the number of windshield claims in Florida has dropped significantly, from 24,720 in the second quarter of 2023 to 2,613 in the second quarter of 2024, according to the Florida governor’s office.
The bill also lowered homeowners insurance premiums for many Floridians. This comes after several major insurance companies have left the state or raised premiums because of severe weather, greater claim frequency and higher costs. That’s forced many homeowners to turn to state-run insurance options, like Citizens Property Insurance.
According to DeSantis, Florida saw the lowest average homeowners insurance premium increases in the U.S. in 2024. Additionally, more than 477,000 home insurance policies have returned to the private market since 2022, indicating that the Florida home insurance market is recovering.
What can drivers do to benefit from stabilizing rates?
Auto insurance premiums could come down in 2025, but that doesn’t necessarily mean your insurance rate will drop. You might need to shop around and get new quotes to see if you can find a better rate from a different insurer.
Before doing so, it’s a good idea to review your coverage needs. Do you have enough coverage, or could you benefit from higher limits? You should also look for gaps in your policy and decide if you need endorsements, like rental reimbursement coverage or roadside assistance.
As you’re shopping for new insurance companies, keep an eye out for discounts. Many insurers offer discounts, but the savings potential can vary. If you want to get the best rate possible, bundling your auto insurance with another policy, like home insurance, can lead to significant savings.
Once you lock in a low premium, it’s important to maintain it by avoiding claims, tickets and accidents. Many insurers offer a telematics-based safe driver rewards program, which tracks your driving habits and reduces your premium when you demonstrate safe driving behaviors.
Looking ahead: Will the trend continue?
Car insurance premiums are expected to decrease in 2025, and some experts believe this trend could continue.
“The factors that drove up auto insurance premiums over the last few years have come down as inflation has cooled off. Now that insurers have largely attained rate adequacy in personal lines auto insurance, rate activity is stabilizing around more historically normal activity,” says Stephen J. Crewdson, managing director of insurance intelligence at J.D. Power.
While this is welcome news for drivers, it’s not guaranteed that rates will continue to drop. There’s concern about whether economic uncertainty could get in the way and ultimately cause rates to increase again.
“There is the potential for macroeconomic factors, tariffs being one, to apply upward pressure on the costs of covering auto insurance claims through 2025. If these costs go up, auto insurance rates are likely to follow,” Crewdson says.
Crewdson also believes that insurance companies will probably raise rates again if they feel it’s necessary for their bottom line.
“Insurers may not wait as long as they did in the recent inflationary wave to increase premiums if they see their costs increasing again,” he says. “Some tough lessons were learned over the last few years, and many insurers are primed to respond quicker to increasing claims costs.”
These predictions leave consumers in limbo: While premiums will likely come down soon, rates may not stay low for long. To take advantage of dropping premiums, it’s essential to shop around for new quotes in case rates go up again.
FAQs
Why are auto insurance rates stabilizing in 2025?
Auto insurance prices are expected to stabilize in 2025 for a few reasons. After years of rate hikes, many large insurance companies have exceeded their underwriting profit goals. Additionally, some insurers are seeing a decrease in claim frequency and amounts, which has allowed them to lower premiums.
How do state reforms impact insurance premiums?
State reforms can impact car insurance premiums because they put regulations and restrictions in place to protect consumers. For example, Florida passed a law in 2023 that banned assignment of benefits for glass repair claims – allowing auto glass shops to file claims and collect payments on behalf of policyholders – to reduce the number of lawsuits filed against insurers. Because insurers are no longer paying high legal fees to fight these claims, the law’s proponents say, carriers can retain profit and lower rates for drivers.
Will my insurance rates decrease?
Predicting if your car insurance premium will decrease this year is hard. While car insurance rates are stabilizing in some states, rates probably won’t come down for everyone. However, you might be able to find a more affordable rate from a different insurer. Now is a good time to shop around and get new quotes to see if you can find a cheaper policy.
Resources & Methodology
Sources
- Executive Office of the Governor Ron DeSantis. “Governor Ron DeSantis announces rate reductions for Miami.” Accessed July 2025.
- FloridaPolitics.com. “Legislature passes bill cracking down on auto glass lawsuits.” Accessed July 2025.
- Northeast News & Media. “New Jersey’s Car Insurance Reduction Act aims to lower rates and increase transparency.” Accessed July 2025.
- U.S. Bureau of Labor Statistics. “Consumer Price Index for All Urban Consumers.” Accessed July 2025.
- Fox8live. “Landry signs auto insurance reform bills amid soaring rates.” Accessed July 2025.
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