Car Insurance Premiums Decline in Some States, Rise in Others

Drivers in Wyoming, Iowa and Arkansas saw the largest price cuts, while New Jersey, Rhode Island and Michigan saw increases.

Published on Feb. 4, 2026

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Car insurance prices finally eased in 2025 after years of increases, but not every state saw costs come down. Nationally, the average full-coverage premium dropped 6% to $2,144 a year. However, 10 states continued to see prices rise, led by New Jersey (+20%), Rhode Island (+13%) and Michigan (+12%). The findings underscored a widening affordability gap, with expensive states seeing price hikes and more affordable states seeing price cuts.

Why it matters

Rising car insurance costs have been a major pain point for drivers in recent years, with the average annual premium jumping nearly 50% from 2022 to 2024. This report highlights the uneven nature of the insurance market, with some states seeing significant relief while others face continued increases, exacerbating affordability issues.

The details

The decline in prices comes after a rapid premium run-up in recent years that 'significantly improved' insurers' financial footing, allowing many to cut rates to compete for customers. However, factors like repair costs, accident severity, supply chain issues and regulatory requirements continue to drive up prices in certain states. Looking ahead, the report projects a 1% increase in the average annual cost of full coverage by the end of 2026, suggesting a relatively stable insurance market, though tariffs and stock market performance could impact future rates.

  • In 2025, the average full-coverage premium dropped 6% to $2,144 a year nationally.

The players

Insurify

An insurance comparison platform that conducted the analysis on car insurance premiums.

Daniel Lucas

Insurify's senior carrier partnerships manager.

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What they’re saying

“The four places with the biggest cost increases in 2025 — New Jersey, Washington, D.C., Rhode Island, and Michigan — also have some of the highest average premiums nationwide.”

— Insurify (thehill.com)

“If the stock market dips, insurers may be more reliant on revenue from premiums for their financial standing, which can lead to higher rates.”

— Daniel Lucas, Insurify's senior carrier partnerships manager (thehill.com)

The takeaway

This report highlights the uneven nature of the car insurance market, with some states seeing significant price relief while others face continued increases. Factors like repair costs, accident severity, and regulatory requirements continue to drive up prices in certain areas, exacerbating affordability issues for drivers.