The average US full-coverage car insurance premium fell 6% in 2025 to $2,144 a year, according to Insurify’s annual report — the first meaningful decline after a period in which costs rose 46% between 2022 and 2024.
Insurify projects the market will roughly stabilise in 2026 rather than continue falling.
Why Rates Fell
The 2022–2024 spike was a correction, not a permanent repricing. Several things collided at once: repair costs jumped as parts and labour inflated, used vehicle values spiked so total-loss payouts rose, medical and litigation costs on injury claims climbed, and driving behaviour deteriorated post-pandemic with a measurable rise in severe crashes.
Insurers were losing money on personal auto and filed for large increases. Those increases took eighteen months to two years to flow through into earned premium.
By 2025 they had. Underwriting returned to profit across the segment, and profitable lines compete. Competition is what produces decreases — carriers that have restored their margins start bidding for share again, and the ones with the best pricing models bid hardest.
The Geographic Split Is Enormous
The national average conceals almost everything that matters.
Drivers in 39 states paid less in 2025. Eight states saw decreases of at least 15%. Wyoming, Iowa and Arkansas each cut average premiums by more than 20%.
Ten states went up. New Jersey rose about 20%, Rhode Island about 13% and Michigan about 12%.
Those divergences are not about driving. They are about state-level legal and regulatory structure — no-fault systems, minimum coverage requirements, litigation environments, and how quickly a state’s insurance department approves filings.
What Drivers Should Do With a Softening Market
A market that has stopped rising is the best shopping environment there is. When rates are climbing quickly, every quote goes stale within weeks and comparison is frustrating. When they flatten, the spread between carriers becomes the dominant variable — and for the same driver, same car, same coverage, that spread is routinely 50% or more.
- Quote at least five carriers, including one regional or mutual insurer. Regional carriers frequently undercut the national brands in their home states and never appear in national advertising.
- Match coverage, not price. Compare liability limits, comprehensive and collision deductibles, uninsured motorist coverage and rental reimbursement line by line. A cheaper quote with lower limits is a different product.
- Update your annual mileage. If you changed jobs or started working from home, your carrier is probably still rating you on an estimate from three years ago. Low-mileage discounts are among the most commonly unclaimed.
- Reconsider your liability limits while prices are soft. State minimums are dangerously low nearly everywhere. Moving from a minimum limit to 100/300/100 typically costs far less than drivers assume, and it is the coverage that protects your assets rather than your car.
- Ask about telematics only if you actually drive well. Usage-based programmes can produce substantial discounts, and they can also raise your rate. Most let you see the score before committing.
One Caution
Loyalty is not rewarded in auto insurance. In a number of states, long-tenured customers quietly pay more than new ones for identical coverage — the practice has been restricted in some jurisdictions and persists in others.
The renewal notice is not a bill. It is an offer.
Sources: Insurify, “Car Insurance Prices Tumbled 6% in 2025”; Insurance Journal, “After Falling 6% in 2025, Average Auto Insurance Cost Will Stabilize in 2026”
Compare the major carriers in our car insurance guide.