Car Insurance Premiums Rise in 27 States as 2025 Relief Fades

The short reprieve is over in much of the country

U.S. drivers got a break from rising car insurance costs in 2025, and in a growing number of states that break has ended. Insurify's 2026 Mid-Year Auto Report found that average full-coverage rates rose in 27 states during the first half of the year, and the company expects 32 states to finish 2026 with higher premiums.21 The national average rose only 1% in that period, to $2,237 a year. That small increase came right after a 6% decline in 2025, when drivers in 39 states paid less for full coverage.16

The biggest increases are concentrated in a few places. Connecticut leads, and Insurify projects that its drivers will pay about 15% more by year-end than they did a year earlier.25 Kentucky and West Virginia are each expected to finish about 8% higher year over year.16 Kentucky stands out because its drivers used to pay $58 less than the national average and now pay roughly $65 more.21 A handful of expensive markets are moving the other way. Rates fell 7% in Washington, D.C., 6% in New Mexico, and 5% each in New Jersey, New York and Massachusetts during the first half of the year.21

Insurify's senior economic analyst, Matt Brannon, describes 2026 as a year of normalization after the 2025 decline, not a new surge.21 That reading holds up across the wider data. The bigger story is how much the major datasets disagree about what is happening right now.

Different datasets, different answers

The claim that rates are "climbing again" depends heavily on which dataset you use. Federal consumer price data shows car insurance costs down 5.1% nationally over the past year, while Insurify's quote database shows increases in 27 states.25 NerdWallet analyzed more than 1.4 billion modeled rates and found that premiums rose just 2.6% in the most recent year. It also found that the median filed rate change in insurers' requests to state regulators was 0% from January 2025 through mid-August 2026.11 Insurers asked for increases on only about a quarter of customer policies in 2026. State Farm sought increases on just 5% of its policies.11

ValuePenguin forecasts that national rates will rise only 0.67% this year, the smallest annual change since a run of double-digit increases began.26 It also expects five of the 10 largest insurers to cut rates, with State Farm cutting by about 4%.26

The state-level details sometimes contradict each other outright. ValuePenguin names New Jersey as having the steepest expected increase at renewal, about 10.46%, and lists Illinois among the states with meaningful decreases.26 Insurify reports the opposite: New Jersey quotes fell in the first half, and Illinois rose.21 The Zebra puts the national average at $2,256 a year, up 3%, and projected that Oregon, Maryland and Utah would see the biggest increases in early 2026.24

The data sources measure different things, so the disagreement makes sense. Insurify tracks real-time quotes for people shopping for a new policy. NerdWallet's figures are modeled rates for a fixed driver profile, and rate filings show what insurers are asking regulators to approve.11 The most defensible reading is that national car insurance prices have leveled off at a very high point, with pockets of increases in certain states. No new nationwide wave of hikes is showing up yet.

That high point is the key context. NerdWallet calculates that the median premium rose 32.3% from January 2023 to January 2026, from $1,784 to $2,359. Per-capita personal income grew only 13% over the same period.11 Since January 2020, the CPI's motor vehicle insurance index has risen 56.2%, compared with 26% for consumer prices overall.11 For a household already paying that much more, a 1% increase still hurts even if it doesn't look like a crisis.

Claims costs are the main driver

The sources broadly agree on why prices have stopped falling: settling a claim keeps getting more expensive. Insurify says auto repair and maintenance costs have risen 45% in five years. Newer vehicles packed with technology are especially expensive to fix after a crash.21 Insurify's analysts also point to repeated severe storms, serious crashes and tariffs on auto parts as pressures that flow through to claims.16

Industry repair data shows how this works. CCC Intelligent Solutions found that sensor calibrations appeared on 28.3% of repairable estimates in late 2025, up from 21.8% a year earlier, and the average repair cost reached $4,818.20 An August 2026 IIHS-HLDI study found that cars with a bundle of driver-assistance features have about 10% higher collision claim costs, even though the same features reduce crashes enough to lower total losses.20 Put simply, the technology prevents some crashes but makes each remaining one more expensive to repair.

Weather is a factor that has little to do with how anyone drives. Hail events in Kentucky rose from an average of 76 a year in 2020–2022 to 178 a year in 2023–2025, which pushes up the cost of comprehensive claims.21 Insurers also cite "social inflation," meaning litigation costs that grow faster than prices overall. The Insurance Research Council links it to more attorney advertising and to outside investors funding lawsuits.11 On the commercial side, auto premiums have now risen for 59 straight quarters, including 5.8% in the first quarter of 2026.20

Not everyone has been hit equally. In NerdWallet's analysis, drivers with poor credit saw premiums rise 37.7% over three years, compared with 32.3% for drivers with good records.11 Six of the 10 states with the largest increases are in the Midwest, led by Minnesota at 56.9%.22

Home insurance: increases slowing, but still rising

Homeowners are in a similar position. Insurify reports that home insurance costs rose 12% in 2025 and another 2.2% in the first half of 2026, putting them on track for a 4% increase this year.5 NerdWallet finds that premiums for a typical home are 24% higher than three years ago. The most recent annual increase was 4.6%.2

Increases are much sharper in some places. Minnesota rates rose 12.9% in the first half of 2026, and premiums in Jefferson Parish, Louisiana, jumped 33%, adding $2,135 a year.1 Insurance.com data shows Massachusetts premiums up 42.9% from 2025, though they remain below the national average.8 Florida is still the most expensive state, at about $8,471 a year.9 Some individual insurers are raising rates again: State Farm added an 8% increase in Illinois, on top of a 27.2% hike in 2025.7

The Midwest shows up in both the auto and home data. NerdWallet notes that hail damages roofs and cars alike, and the region's home premiums rose 25% in three years.192 Older homes have also become much more expensive to insure: they now cost 81% more than newly built homes.2

Health coverage: the steepest increases are coming here

Car insurance is only one part of the squeeze on household budgets heading into 2027, and it isn't the largest. Marsh projects that employer health benefit costs will rise 8.2% per worker, the most since 2003. WTW forecasts 11.1%, and Aon forecasts 9.5%. Fifty-nine percent of employers plan cost-cutting changes such as higher deductibles. About two-thirds of large employers expect to raise the share of premiums that workers pay.33

The individual market faces even bigger increases. Across 276 insurers on the ACA marketplace, the median proposed premium increase for 2027 is 15%. Last year, the median finalized increase was 20%. Proposed increases range from 3% in Vermont to 29% in Arizona. Analysts cite growing use of GLP-1 weight-loss drugs, consolidation among healthcare providers, and the expiration of enhanced ACA subsidies, which insurers expect will push healthier people out of the market. Enrollees earning above 400% of the federal poverty line get no subsidy and pay the full increase. In Medicare, the standard Part B premium is projected to rise to about $209.50 a month.33

Analysis: what actually happened

What ties these markets together is not a single new wave of price spikes. It's that underlying costs have stayed high: repairs, rebuilding, weather losses and medical care. Car insurers built up rate cushions during 2023–2024, and the 2025 cuts drew some of that down. With repair costs still rising, many insurers now appear to be adjusting state by state instead of continuing to cut.16 The national change looks small, but the effect on individual households depends heavily on location.

For drivers, the practical takeaway is that a renewal notice reflects where you live and how you're rated, not the national headline. Car insurance is the one household policy whose price has largely stopped climbing. Home insurance is still rising, and health insurance is speeding up. Together, those trends will matter more to household budgets in 2027 than the auto increases now concentrated in Connecticut and Kentucky.