Auto Insurance Rates Leveling Off in 2026, Preserving Last Year’s Price Drop

Perhaps the second-highest cost after the payment, insurance has car owners digging into their bank accounts on the regular, and until last year, the annual price for auto insurance has risen, including  a massive 14.4 percent jump in 2023, according to the National Association of Insurance Commissioners.

However, a new report from Insurify.com, an insurance website, shows that after a 6 percent dip in 2025, auto  insurance prices are expected to remain flat, moving from an average of $2,144 to $2,158 in 2026. It’s a marked change after a 46 percent jump between 2022 and 2024. The premium increased during that time came as part of an effort by companies to protect themselves against a massive increase in risky driving behaviors that escalated during the pandemic. 

During the second half of 2020 and all of 2021 there were substantially fewer people on the road due to lockdown policies implemented to try to prevent the spread of COVID-19. With more wide-open spaces, the inhibitions of some drivers fell, causing an increase in crashes. 

Fast forward to now, and the high premiums have bolstered insurers bottom lines, allowing them to “absorb tariff-driving costs without raising prices. Now many insurers are cutting rates to attract and retain new customers.”

However, not all American drivers are going to see the same benefit as price for car insurance varies wildly from state to state. The upside, according to Insurify, is that you are likely to see some sort of pricing improvement or consistency this year as 39 states posted premium decreases in 2025. Wyoming, Iowa, and Arkansas residents enjoyed the biggest cuts, with prices falling more than 20 percent.

If you live in Washington, D.C., New Jersey, Rhode Island, or Michigan, there is no joy in Mudville today. Premiums in those four spots rose an average of 12 percent last year. Keeping with the averages, those residents paid nearly twice as much ($4,017 vs. $2,144) as the rest of the country in 2025.

The places with paying the highest average amount in 2026, including any expected increase or decrease include: Washington, D.C. (1.8 percent or $71), Maryland (-0.2 percent or $7 less), Rhode Island (1.7 percent or $56), Michigan (0.2 percent or $6), and New York (0.7 percent or $22). All those states pay more than $3,000 a year annually for auto insurance.

And if you’re looking to cut what you spend on auto insurance each year, look to states with small populations, starting with New Hampshire where the 2026 average is expected to be $957. It’s followed by Wyoming ($1,052), North Dakota ($1,147), Iowa ($1,230), and Idaho ($1,244).

[Images: Shutterstock; Charts: Insurify]

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