How car insurance prices moved, 2024–2026
The BLS tracks what consumers pay for car insurance in its Consumer Price Index. That index measures the price of coverage, not what any one driver pays, but it is the best long-run gauge of the trend.
| Period | Motor vehicle insurance price change (12 months) |
|---|---|
| September 2022 – February 2025 | Above 10% every month |
| April 2024 (peak) | +22.6% |
| January 2025 | +11.8% |
| December 2025 | +2.8% |
| May 2026 | −2.0% (first annual decline since 2021) |
| June 2026 | −4.1% |
| July 2026 | −4.5% |
| August 2026 | −5.1% |
Source: BLS CPI news release for August 2026 (Sept. 11, 2026); earlier readings from actuary.info's analysis of the BLS series.
Put simply, prices rose fast for more than two years, leveled off through 2025 and early 2026, and have edged down since. The August 2026 drop of 5.1% was the largest 12-month decline since November 2020, and the index fell for four straight months from May through August. USAFacts estimates that car insurance prices rose about 54% from 2020 to 2024, so even after the recent dip, drivers are paying far more than before the pandemic.
Overall inflation was 3.4% over the same 12 months to August 2026, so car insurance prices are falling while prices overall are still rising.
Why rates rose so sharply
Repair and parts costs
Repair costs are the biggest driver. Insurify, citing BLS data, says auto maintenance and repair costs rose 45% over the past five years, compared with 14% in the five years before. The BLS shows the climb hasn't stopped: maintenance and repair prices were up 5.2% in the year to August 2026, even as insurance prices fell.
Claims severity and total losses
Each claim costs more than it used to. Insurify reports that collision claim costs rose 42% and bodily injury claim costs 36% from 2020 to 2024. J.D. Power's 2025 claims study found that 27% of claims ended in a total loss, up from 16% in 2022. More totaled cars mean bigger payouts per claim. Repairs have gotten quicker, though: the average repair took 19.3 days, down from 22.3 days a year earlier.
Lawsuits and legal costs
Industry analysts call rising litigation costs "social inflation." S&P Global Market Intelligence flagged it as a growing threat that pushes up the severity of injury claims, especially for at-fault drivers with high liability limits. Insurify notes that Georgia's tort reform and Florida's reforms aimed at legal-system abuse and claims fraud have factored into recent rate changes in those states.
Weather
Hail and storms drive comprehensive claims. Insurify found that Kentucky averaged 178 hail events a year from 2023 to 2025, up from 76 a year in 2020–2022, one reason Kentucky is among the states seeing increases in 2026.
Insurer finances and regulation
USAFacts points out that interest rate hikes in 2022 lowered the value of insurers' bond holdings, adding pressure to raise premiums. State regulators review rate filings, and complex approval processes can delay or soften increases, which helps explain why rates kept rising well after repair inflation peaked.
Why rates leveled off
After big rate increases, insurers became profitable again. S&P Global projected a 2025 personal auto combined ratio of 92.7, meaning insurers paid about 93 cents in claims and expenses for every premium dollar. Insurify says insurers cut rates in 2025 as claims fell: its national full-coverage average dropped 6% that year, about $140, and 39 states saw decreases. S&P described a market where rate cuts were matching rate increases and insurers were spending more on advertising to win customers.
The 2026 picture by state
National averages mask wide state differences. Insurify's 2026 mid-year report put the average full-coverage premium at $2,237 a year in the first half of 2026, up 1% from the end of 2025. Its October 2026 report shows full coverage steady at $187 a month and liability-only coverage at $99, up a dollar from the month before.
Where you live still matters far more than the national trend. In that October report, Maryland drivers averaged $302 a month for full coverage and New Hampshire drivers $85, a gap of roughly 3.6 times. A small percentage change in an expensive state can add more dollars to your bill than a large change in a cheap one. Connecticut's 10% first-half increase, for example, added about $251 to the average annual premium there.
| Largest increases, first half of 2026 | Change | Largest decreases, first half of 2026 | Change |
|---|---|---|---|
| Connecticut | +10% | Washington, D.C. | −7% |
| Kentucky | +6% | New Mexico | −6% |
| West Virginia | +5% | New Jersey | −5% |
| Illinois | +4% | New York | −5% |
| Nevada | +4% | Massachusetts | −5% |
Source: Insurify 2026 Mid-Year Auto Insurance Report (August 2026), based on Insurify quote data.
Florida (−4%) and Arkansas (−4%) also fell in the first half. In all, 27 states saw increases. For full-year 2026, Insurify projects increases in 32 states and a national average of $2,242. Its projected full-year increases are led by Connecticut (15%), Kentucky (8%), West Virginia (8%), Illinois (6%) and Nevada (6%).
J.D. Power's 2026 study shows how this feels to customers: 30% reported an insurer-initiated premium increase in the past year, and their satisfaction with price was 155 points lower than that of customers whose premium held steady or fell.
What to expect for 2027
No forecaster we found has published a national 2027 rate projection, so treat any specific number you see with caution. The available evidence points in two directions.
- Downward pressure on the index. Rate cuts that insurers filed in 2025 take time to show up in what customers pay. An actuary.info analysis of the BLS data expects the CPI to keep showing year-over-year declines into mid-2027 as those cuts work through renewals.
- Upward pressure on costs. Repair prices are still rising 5%–7% a year, and S&P Global expects insurer margins to narrow: its total auto combined ratio forecast rises from 94.5 in 2025 to 97.1 in 2026 and 98.9 in 2027. When margins shrink, insurers file for increases, and filings take about a year to fully affect premiums.
- State-by-state divergence. States with heavy weather losses or rising claim costs, like those leading Insurify's 2026 increases, may keep rising while others stay flat or fall.
The likely result: a modest national change in 2027, with your renewal depending more on your state and insurer than on the national trend.
How to respond to a rate increase
- Read the renewal notice. Check whether the increase came from a statewide rate change or something on your record, such as a claim, a ticket or a new driver.
- Compare quotes. CarInsurance.com found a median gap of $1,894 a year between the cheapest and most expensive insurer in a state for the same driver. When rates are falling in many states, switching can pay off quickly. Our guide to the cheapest car insurance shows which insurers had the lowest averages in 2026.
- Raise your deductible if you can afford it. Moving from $250 to $1,000 saved about $511 a year on average in CarInsurance.com's data. J.D. Power found 26% of customers already carry a deductible of $1,000 or more. Keep enough in an emergency fund to pay it.
- Drive less, pay less. If you drive under 10,000 miles a year, ask about low-mileage or pay-per-mile options.
- Check insurer quality, not just price. Our comparison of the best auto insurance companies covers satisfaction, complaints and financial strength.
- Re-check every renewal. With prices moving in different directions by state, last year's best deal may not hold. Build the premium into your budget as a known yearly cost.
Frequently asked questions
Are car insurance rates going down in 2026?
Nationally, yes, slightly. The BLS motor vehicle insurance index was 5.1% lower in August 2026 than a year earlier. But Insurify counted increases in 27 states in the first half of 2026 and projects increases in 32 states for the full year.
Why did car insurance go up so much in 2023 and 2024?
Repair and parts costs, more expensive claims and more total losses, rising legal costs and weather losses all pushed premiums higher. The BLS index peaked at a 22.6% annual increase in April 2024.
Will car insurance go up in 2027?
No national 2027 forecast was available as of October 2026. Repair costs are still rising and S&P Global expects insurer margins to narrow, which could lead to increases in some states, while earlier rate cuts may keep the national index soft into mid-2027.
Which states have the biggest car insurance increases in 2026?
In Insurify's 2026 mid-year report, Connecticut (+10%), Kentucky (+6%), West Virginia (+5%), Illinois and Nevada (+4% each) had the largest first-half increases.
Why did my premium go up if national prices fell?
National figures are averages. Your premium can rise because of your state's rate filings, a claim or ticket, a new driver or vehicle, or changes in how your insurer prices your area. Compare quotes at renewal.
What is a combined ratio?
It compares an insurer's claims and expenses with the premiums it earns. Below 100 means the insurer made an underwriting profit; above 100 means it lost money on its policies.
Sources
- U.S. Bureau of Labor Statistics – Consumer Price Index, August 2026 (Sept. 11, 2026)
- Autobody News – Vehicle maintenance and repair prices up 5.2% as auto insurance index falls 5.1% (Oct. 2026)
- actuary.info – CPI motor vehicle insurance, August 2026
- USAFacts – Why are car insurance rates increasing?
- Insurify – 2026 mid-year car insurance report
- Insurify – Average car insurance rates as of October 2026
- Autobody News – Insurance price index falls nationally as state rate filings climb (Aug. 2026)
- Insurance Journal – Good times for US P/C insurers may not last; auto challenges ahead (Jan. 2026)
- J.D. Power – 2026 U.S. Auto Insurance Study press release
- Business Wire – J.D. Power 2025 U.S. Auto Claims Satisfaction Study
- CarInsurance.com – Cheapest car insurance (Sept. 2026)
Rates, fees and terms change often. Figures were checked in October 2026; confirm current details with the provider before you apply.