Why is car insurance so expensive, and will it go down in 2026?

Why did my car insurance go up?

Your car insurance may have gone up for several reasons, including inflation, increased repair costs and part shortages, high levels of insurance litigation and the increased frequency and severity of natural disasters.

These are the main reasons for higher car insurance rates:

Inflation. The post-pandemic years saw inflation rise across the board, and that inflation hit insurance companies due to the increased cost of parts for repairs. That led to increases in insurance rates to cover those parts.
Increased repair costs. Inflation isn't the only thing driving up the cost to repair cars. As vehicles include more technology, like sensors and cameras, the cost to replace damaged parts also becomes more expensive.
Longer repair times due to parts shortages. Supply chain disruptions that came out of the pandemic are still affecting the auto industry. As it takes longer to obtain parts, claims drag out and insurance companies pay more for rental cars and labor.
Litigation. In some areas, particularly Florida, insurance rates are affected by the high cost of litigation, with lawsuits costing insurance companies both in court costs and settlements.
Natural disasters. Floods, wildfires and severe storms have all resulted in more car insurance claims.

Car insurance cost trend 2022-2025

Car insurance rates have climbed steadily over the past few years, with the average monthly rate climbing from $128 in 2021 to $215 in 2025 for a full coverage policy with liability limits of 100/300/100 and $500 deductibles.

Year	Average annual premium	Average monthly premiums
2021	$1,538	$128
2022	$1,730	$144
2023	$2,091	$174
2024	$2,457	$205
2025	$2,578	$215

Car insurance cost trends by company: Which increased the most?

All of the major car insurance companies have increased their average rates over the past few years, but some more than others. In 2023, six of the eight major carriers below offered an average rate for full coverage that was under $2,000 a year. In 2025, USAA is the only major carrierAn insurance carrier is the company that provides your car insurance policy and pays claims. with an average that still falls under $2,000, and it's only open to military families.

The rates below are based on a full coverage policy that includes liability limits of 100/300/100 and $500 deductibles.

Car insurance rate trends by company, 2022 - 2025
Company	Average annual car insurance costs 2022	Average annual car insurance costs 2023	Average annual car insurance costs 2025
Allstate	$2,086	$2,509	$3,205
Farmers	$2,021	$2,387	$3,085
GEICO	$1,266	$1,763	$2,148
Nationwide	$1,191	$1,548	$2,463
Progressive	$1,711	$1,998	$2,675
State Farm	$1,436	$1,984	$2,874
Travelers	$1,474	$1,606	$2,103
USAA	$1,181	$1,381	$1,572

Which states have had the biggest car insurance rate increases?

The states with the biggest rate increase since 2023 are Nevada at 59%, Connecticut at 58% and Washington, D.C. at 57%. Alabama, Hawaii, and Wyoming rates increased an average of 13%, the smallest increase.

See how much rates have gone up in your state below for a full coverage policy at 100/300/100 liability limits with $500 deductibles.

Car insurance rate trends by state, 2022-2025
State	Average annual costs in 2023	Average annual costs in 2025	$ difference	% differences
Alaska	$1,676	$2,215	$539	32%
Alabama	$1,860	$2,107	$247	13%
Arkansas	$1,957	$2,723	$766	39%
Arizona	$1,812	$2,333	$521	29%
California	$2,416	$3,010	$594	25%
Colorado	$2,337	$3,222	$885	38%
Connecticut	$1,725	$2,726	$1,001	58%
Washington, D.C.	$2,157	$3,394	$1,237	57%
Delaware	$2,063	$3,097	$1,034	50%
Florida	$2,694	$3,852	$1,158	43%
Georgia	$1,970	$2,739	$769	39%
Hawaii	$1,517	$1,721	$204	13%
Iowa	$1,630	$2,228	$598	37%
Idaho	$1,428	$1,791	$363	25%
Illinois	$1,532	$1,901	$369	24%
Indiana	$1,515	$1,856	$341	23%
Kansas	$1,900	$2,410	$510	27%
Kentucky	$2,228	$2,976	$748	34%
Louisiana	$2,883	$4,180	$1,297	45%
Massachusetts	$1,726	$2,430	$704	41%
Maryland	$1,746	$2,273	$527	30%
Maine	$1,175	$1,701	$526	45%
Michigan	$2,352	$3,146	$794	34%
Minnesota	$1,911	$2,561	$650	34%
Missouri	$1,982	$2,410	$428	22%
Mississippi	$2,008	$2,455	$447	22%
Montana	$2,193	$2,541	$348	16%
North Carolina	$1,741	$2,587	$846	49%
North Dakota	$1,665	$2,079	$414	25%
Nebraska	$1,902	$2,387	$485	25%
New Hampshire	$1,265	$1,650	$385	30%
New Jersey	$1,902	$2,736	$834	44%
New Mexico	$2,049	$2,486	$437	21%
Nevada	$2,060	$3,284	$1,224	59%
New York	$1,870	$2,898	$1,028	55%
Ohio	$1,417	$1,739	$322	23%
Oklahoma	$2,138	$2,705	$567	27%
Oregon	$1,678	$1,927	$249	15%
Pennsylvania	$1,872	$2,428	$556	30%
Rhode Island	$2,061	$2,706	$645	31%
South Carolina	$2,009	$2,367	$358	18%
South Dakota	$2,280	$2,635	$355	16%
Tennessee	$1,677	$2,214	$537	32%
Texas	$2,043	$2,631	$588	29%
Utah	$1,825	$2,250	$425	23%
Virginia	$1,469	$1,837	$368	25%
Vermont	$1,319	$1,504	$185	14%
Washington	$1,608	$2,175	$567	35%
Wisconsin	$1,664	$2,026	$362	22%
West Virginia	$2,005	$2,557	$552	28%
Wyoming	$1,758	$1,984	$226	13%

What factors determine how much you pay for auto insurance?

Many factors impact what you are charged for auto insurance, including your age and gender, where you live, the coverage you choose, your vehicle make and model and your driving record; in most states, credit also affects your insurance rates.

Age and gender. Drivers younger than age 25 and older than age 70 typically pay the most for auto insurance because of their higher accident frequency. The same applies to gender, with men paying more due to higher accident risk. "Typically, inexperienced drivers pay more for premiums, and female drivers pay less than male drivers for auto insurance," says financial expert Lyle Solomon, principal attorney for Oak View Law Group in Rocklin, California.
Location. Areas with more claims typically pay higher rates. "More populous states typically have average higher rates than less dense locations. Due to higher rates of vandalism, theft, and accidents, urban drivers also pay a higher auto insurance price than those in small towns or rural areas," says Mark Friedlander, director of corporate communications for the Insurance Information Institute.
Coverage. The more auto insurance coverage you have, the more you pay for insurance. "The limits on your basic auto insurance required by your state, the amount of your deductible, and the types and amounts of policy options -- such as comprehensive and collision coverage -- that are prudent for you to have all affect how much you will pay for coverage," says Friedlander.
Driving and claims record. If you have traffic violations, tickets and accidents on your driving record, your insurance rates will likely spike. "A bad driving record shows that you are more likely to file insurance claims, so insurance companies will consequently charge higher premiums," says Solomon.
Type of vehicle. The value of your car, based on its make, model, age, mileage, and other factors, impacts your auto insurance premiums. Other variables include the cost of repairs, the likelihood of theft, engine size, and the overall safety record of your vehicle. "Sports cars usually have steeper insurance premiums than other types of vehicles. They go fast and have a higher risk of getting into accidents frequently," Solomon says.
Credit history. Credit is correlated with the risk of filing a claim, so many insurance companies use it as a rating factor. A few states have outlawed this practice.

Will car insurance rates go down in 2026?

While rate increases have leveled off, it's unlikely that drivers will see lower rates in 2026. Because rate increases can take a while to show up on your bill, you may see increases this year that were approved last year.

Rate increases don't show up until your policy renews, which for car insurance is usually every six months. So, if your insurer is raising rates, you won't see it right away.

How to lower your car insurance premiums

There are many things you can do to shrink the size of your car insurance premiumThe payment required for an insurance policy to remain in force. Auto insurance premiums are quoted for either 6-month or annual policy periods..

Shop around for auto insurance. Shopping around is the best way to get a lower rate on car insurance. When considering quotes from multiple insurance companies, "set the same coverage, deductibles, and limits so that you are comparing apples to apples," Solomon says.
Ask about discounts, including bundling. Friedlander recommends purchasing your auto and home insurance from the same insurance company. Bundling discounts can save you 20% or more. "Additionally, ask about other common discounts you may be eligible for. These can include a discount for having anti-theft devices, completing a defensive driving course, driving low miles annually, being a long-time customer, having more than one vehicle on the policy, and having no accidents or moving violations in the past three years," he says.
Choose a higher deductible. Increasing your deductible is another way to lower your premium. You can save hundreds by increasing your deductible from $500 to $2,000.

FAQ: Why car insurance rates have gone up

Why is my insurance so high with no accidents or tickets?

Your rates may have gone up due to inflation, a higher frequency of accidents compared to the onset of the pandemic, supply chain disruptions, higher repair costs, and longer repair times because of parts shortages, even if you have a clean record.

What you pay will also depend on your age, gender, state, coverage options, type of car, credit score, driving habits, deductibleThe deductible is the amount you pay out of pocket for a covered loss when you file a claim., and marital status.

Why is insurance so expensive under 25?

Drivers under 25 pay higher rates due to the statistically higher rate of collisions. Teen drivers pay the highest rates, and then rates decrease steadily through your early 20s as risk decreases.

Is insurance higher for new cars?

Yes, insurance premiums are usually higher for newer vehicles because of their higher market value. The cost of repairs is also greater for newer vehicles because of manufacturer-installed safety features that can be expensive to replace or repair. Most new cars require full coverage insurance due to lender and lease requirements, which also means higher rates.

Why is my car insurance going up every year?

Car insurance rates go up annually due to inflation and increasing repair costs over time. Areas with high rates of natural disasters or litigation see more frequent insurance rate increases due to the high frequency of claims.

Which cars have the highest insurance rates?

Cars with the highest car insurance rates are those with a high purchase price; in 2026, the Maserati Quattroporte is the most expensive vehicle to insure at an average of $7,090 a year, followed by the Maserati Ghibli ($6,386 a year) and the BMW M8 Gran Coupe ($5,985 a year).