Car Insurance Costs Are Not Getting Cheaper

Last Updated on October 18, 2026

By James Shaffer Reviewed by Thomas Rockford, insurance industry executive and financial analyst, on October 18, 2026 How we fact-check

Car insurance prices were fairly steady for a long stretch. In the last few years, though, premiums have surged across most of the United States. The NAIC’s 2024 Auto Insurance Database Average Premium Supplement, published in September 2026, puts the average amount spent per insured vehicle at $1,431.63 in 2024, up from $1,047.75 in 2020, a 36.64% increase. Its combined average premium for a policy carrying liability, collision and comprehensive was $1,612.81. Those figures measure what drivers spent through 2024. A different gauge, the Bureau of Labor Statistics’ consumer price index for motor vehicle insurance, fell 5.0% over the 12 months ending September 2026, so the climb has slowed for now. A national price index says nothing about any one driver’s renewal, which can still go up. Inflation, higher repair and medical costs, more severe claims, and increasingly complex vehicles have all pushed auto insurance rates higher.

The Insurance Research Council (IRC), which measures affordability as auto insurance spending divided by median household income, reported in 2015 that all but a handful of states had become more affordable from the 1990s to the 2000s. Its March 2025 brief put spending at 1.51% of income per vehicle in 2022, below the 2003 peak of 1.9%, and projected roughly 1.6% for 2023 and 1.7% for 2024 as premiums rose faster than incomes. Where you live matters a great deal: the same brief ranked Louisiana least affordable at 2.67% of income and North Dakota most affordable at 0.93% for 2022. Our state guides for Wyoming, Florida, Louisiana, Michigan, Montana, and Alaska cover what drives prices in each.

Auto insurance rates have increased significantly in recent years due to inflation, higher repair costs, and more severe claims.
Relative to income, insurance got more affordable through the 2000s and 2010s; the Insurance Research Council projects the recent increases have given back part of that gain, though not all of it.
Shopping around, safe driving, bundling, and asking for discounts remain the best ways to cut costs.
Reviewing your coverage regularly ensures you stay protected without overpaying.

Table Of Contents

Why Car Insurance Costs Have Increased
How Drivers Can Save Money in Today’s Market
Balancing Cost and Coverage
FAQs
Sources

Why Car Insurance Costs Have Increased

Most states have experienced notable premium increases since the early 2020s. Several key factors explain why many drivers now pay more:

Inflation and higher repair costs: Materials, vehicle parts, and labor costs have climbed significantly, raising overall claim expenses.
More severe and frequent claims: Distracted driving, extreme weather events, and rising medical costs have contributed to higher payouts.
Advanced vehicle technology: Modern cars have sensors, cameras, and electronic components that are costly to repair or replace.
Higher rates of uninsured drivers: The Insurance Research Council estimates 15.4% of drivers countrywide were uninsured in 2023, and that the share has risen since 2017. Insured drivers pay for that through uninsured motorist coverage and unpaid claims.
Regulatory differences: Each state sets its own insurance rules, which can impact rate increases, competition, and the availability of discounts.
Economic stressors: Shifts in employment, traffic patterns, and claim behavior following the pandemic created financial pressure on insurers.

How Drivers Can Save Money in Today’s Market

Even though the broader trend shows rising costs, individual drivers still have control over what they pay. Here are several reliable ways to reduce premiums:

1. Shop Around

Comparing quotes is still one of the most effective ways to find savings. Visit an auto insurance comparison site or get quotes directly from multiple insurers. Companies vary significantly in how they evaluate risk, so prices for the same driver can differ widely.

2. Maintain a Clean Driving Record

Your driving history remains one of the strongest predictors of your premium. Tickets, accidents, and claims raise rates, while safe driving habits can help keep costs down. Many insurers now offer telematics or driver-monitoring programs that reward careful driving.

3. Ask for Discounts

Many drivers overlook discounts that can substantially lower costs. Ask your insurer about:

Good student discounts
Multi-policy bundling (home, renters, auto)
Low-mileage or usage-based discounts
Safety feature discounts
Paperless or autopay discounts

Policies vary, so always inquire about everything you may qualify for. Some insurers also offer low-mileage savings if you don’t drive much.

4. Improve Your Driving Record with Courses

If you’ve had violations in the past, consider taking a defensive driving course. Many states allow these classes to remove points from your record or qualify you for a discount.

Balancing Cost and Coverage

While insurance has become more expensive, drivers should avoid cutting coverage too aggressively. Make sure the policy provides the right amount of protection for your personal needs. If you drive an older vehicle, you may consider adjusting collision or comprehensive coverage — but weigh the potential savings against the risk of being under-insured.

Even in a pricier insurance climate, smart shopping, safe driving, and maximizing discounts can significantly reduce what you pay. Regularly reviewing your policy and comparing offers every 6–12 months is now more important than ever.

My advice is to stop treating a rate increase as weather. When the renewal comes in higher, pull out the declarations page, get three quotes with the same limits and deductibles, and call your current company with the lowest one in hand. Staying put rarely earns a lower price on its own.

FAQs

Why have car insurance rates gone up so much recently?

Auto insurance costs have climbed across most of the U.S. due to several factors: inflation, higher repair and parts prices, more severe and frequent claims, rising medical costs, more complex vehicle technology (sensors, cameras, ADAS), and an increase in weather-related and uninsured motorist claims. All of this means insurers are paying out more per claim than they did in the past—and premiums reflect that.

Didn’t car insurance used to be more affordable? What changed?

Relative to income, yes, for a long time. The Insurance Research Council found auto insurance spending fell from 1.9% of median household income per vehicle in 2003 to 1.51% in 2022. Since then the trend has reversed. High inflation, more expensive repairs, larger claim payouts, and economic stress after the pandemic have pushed rates up in most states, and the IRC projected the share back near 1.7% for 2024, which gives back part of the earlier gain. The pressure has eased since: the Bureau of Labor Statistics’ motor vehicle insurance price index fell 5.0% over the 12 months ending September 2026, though that is a national index, not a promise about your renewal.

Are some cities and states more expensive than others for car insurance?

Definitely. Location is a major factor in pricing. Dense cities with more crashes, more theft, costly repairs, and severe weather tend to have the highest premiums. By state, the NAIC’s 2024 figures put average spending per insured vehicle highest in Florida ($2,017.97), New York ($1,980.93), and Louisiana ($1,880.42) and lowest in North Dakota ($907.25), Maine ($934.54), and Hawaii ($934.69). The NAIC cautions that these averages don’t adjust for coverage limits, vehicles, or state laws, so compare states with care.

What can I do to lower my car insurance costs in this expensive market?

You still have plenty of control. The most effective steps include: shopping around with multiple insurers, maintaining a clean driving record, asking for every discount you qualify for (multi-policy, good student, safe driver, low mileage, telematics, safety features, autopay, paperless), adjusting your deductibles, and reviewing your coverage to make sure you aren’t over-insured—especially on older vehicles.

Is it a good idea to cut coverage just to save money?

You should be careful. While dropping collision or comprehensive on an older, low-value car can make sense, cutting liability limits too far can leave you exposed to major out-of-pocket costs after a serious crash. The goal is to balance cost and protection—trim coverage that no longer makes sense, but keep enough liability and essential protection so one accident doesn’t wreck your finances.

How often should I shop for car insurance in today’s environment?

Because insurers are updating rates more frequently, it’s wise to compare quotes every 6–12 months, and anytime something changes—moving, buying a car, adding/removing a driver, or after tickets/accidents fall off your record. Regular comparison shopping helps you catch price hikes, find new discounts, and ensure you’re not overpaying as the market shifts.

Do things like telematics and usage-based insurance really help lower premiums?

For many drivers, yes. Usage-based programs track your real driving (mileage, braking, speeding, time of day) and reward safe, low-mileage habits with personalized rates. In a rising-cost environment, these programs can be powerful tools—especially for cautious drivers, remote workers, and people who drive less than average.

What’s the single best step I can take if my rate just went up?

Don’t just accept the increase—treat it as your cue to shop. Get quotes from at least three to five insurers with the same coverage limits and deductibles. Ask your current insurer to re-rate your policy and review discounts. In many cases, switching carriers or adjusting your coverage intelligently can offset some or all of a recent rate hike.

Sources

Checked October 18, 2026

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