Car Insurance Prices Are 5% Lower Than a Year Ago — but Only 22% of Drivers Shopped: Who's Getting Cuts, the States Still Rising and How to Lower Your Renewal (Oct. 2026)

Your renewal notice is the best moment to call around. Insurers are competing for new customers again, and identical coverage can be priced very differently. Photo: RDNE Stock project / Pexels (8052223), Pexels License.

Last updated Oct. 17, 2026. Prices, rate-filing data and state figures below were checked against the Bureau of Labor Statistics and the other sources linked in each section on Oct. 17, 2026.

For the first time in years, the national numbers on car insurance are moving in drivers' favor. The Bureau of Labor Statistics' consumer price index for motor vehicle insurance was 5.0% lower in September 2026 than a year earlier, according to the September CPI report released this week. That happened while overall prices rose 3.7% and gasoline jumped 34.2%. On Oct. 16, the Bank of America Institute reported that the median amount its customers actually paid for property insurance (auto, homeowners and renters) rose just 1% over the past year, after about 6% in 2025 and roughly 12% in 2024.

That doesn't mean your next renewal notice will be smaller. Averages hide big differences by state, insurer, age and driving record. Connecticut drivers saw full-coverage costs jump more than 10% in the first half of 2026, while drivers in New York and New Jersey saw drops of about 5%. Gen Z households are still seeing increases near 6%. And many insurers have cut prices for new customers faster than they've passed savings to people who simply renew.

The gap between what the market charges and what you pay is where the money is. A recent NerdWallet survey found that only 22% of insured Americans shopped for a new policy in the past 12 months. This guide shows where prices are falling and rising, why, and a step-by-step plan to check whether your policy is overpriced before it renews.

The 30-second version

• National prices are down. The CPI motor vehicle insurance index was 5.0% below its year-earlier level in September 2026 (BLS). The decline seems to be leveling off, though: the seasonally adjusted index rose 0.1% from August.
• What people pay is roughly flat. Median insurance payments rose 1% and average payments rose 3% from September 2025 to August 2026, according to Bank of America payments data.
• Your state matters more than the headline. Insurify's mid-2026 data shows first-half increases in 27 states. Connecticut (+10.5%), Kentucky (+6.4%) and West Virginia (+4.7%) led, while Washington, D.C. (−6.7%), New Mexico (−5.6%) and New Jersey (−5.3%) fell.
• Insurers are competing again. NerdWallet's review of state rate filings found a median filed change of 0% from January 2025 through mid-August 2026, and LexisNexis found 35% of early-2026 auto rate revisions were cuts.
• What to do: pull your declarations page, get at least three quotes for identical coverage 30 to 45 days before renewal, ask your current insurer to re-rate you, and check whether a $1,000 deductible fits your emergency fund.

What the new numbers actually say

Four different data sources came out in the past few weeks. They measure different things, so it helps to read them together instead of picking the most dramatic one.

Source	What it measures	Latest reading
BLS consumer price index	The price of the same insurance coverage over time	−5.0% year over year (Sept. 2026)
Bank of America Institute	What its customers actually paid insurers	Median +1%, average +3% (Sept. 2025–Aug. 2026)
Insurify	Average full-coverage quotes in its marketplace	$2,237 a year in mid-2026, up 1% since Dec. 2025
Experian	Policies sold through its auto insurance marketplace	$2,254 a year overall; $2,912 for full coverage (Sept. 2026)
NerdWallet	Modeled rates for a fixed driver profile	Median $2,359 in Jan. 2026, up 32.3% in three years

Why the numbers differ: the CPI follows a fixed policy, so it captures rate cuts and rebates. Payment data reflects what households really spend, which also rises when people add cars, add drivers or buy more coverage. The Bank of America Institute noted that the gap between its 1% median and 3% average suggests most people saw little change while a minority took big hits. Its data also excludes premiums paid through mortgage escrow or payroll, so it leans toward auto and renters coverage. Quote averages like Insurify's and Experian's depend on who is shopping and what coverage they pick.

The common thread is clear, though. After the double-digit increases of 2023 and 2024, the national market has stopped getting more expensive, and in many places it has turned. NerdWallet's 2026 rates report found that rates rose 13.8% and 13.2% in the first two years of its study, then just 2.6% in the most recent year. Insurers sought increases on only 24.2% of policies in filings through mid-August 2026, compared with 67.5% in 2024 and 91.4% in 2023.

Why prices stopped climbing

Car insurance is priced partly on past losses. When claims costs exploded after the pandemic, insurers spent 2023 and 2024 catching up. Several things have since eased:

• Premiums caught up with losses. NerdWallet cites Insurance Information Institute analysis that auto premiums had lagged losses for years before rebounding. Once they caught up, insurers no longer needed double-digit increases.
• Fewer costly events. As reported by Insurance Business, the Bank of America report points to fewer crashes per mile driven through 2024 and vehicle replacement costs that peaked in 2022. Insurify notes that vehicle thefts fell sharply in 2025 in several high-cost places, including D.C. and New York.
• Competition for new customers. With finances repaired, insurers are pricing new business aggressively. LexisNexis Risk Solutions found that 35% of U.S. auto rate revisions in early 2026 were decreases, 39% were increases and 26% held flat. Perr&Knight's Q2 2026 filings review put the median approved personal auto rate change at just 0.1%, with 20 states showing negative medians. That compares with 8.0% in 2024.

What could push prices back up

Repair costs are the stubborn part. The CPI index for motor vehicle maintenance and repair was up 5.8% over the year to September 2026, and NerdWallet notes that sensors, cameras and crash-avoidance systems in newer cars are expensive to fix. Insurify expects the national average to finish 2026 at $2,242, up 1% for the year, with 32 states on track for increases. That's a projection, not a promise, so treat 2026 as a window when shopping is likely to pay off rather than the start of a long decline.

Winners and losers: where your state stands

Insurance is regulated and priced state by state, and even ZIP code by ZIP code. Insurify's mid-2026 report, based on more than 250 million quotes, shows how far apart states have drifted. Its figures are for drivers aged 20 to 70 with clean records and average or better credit, so treat them as a benchmark, not a quote.

Full-coverage premiums rose as much as 10.5% in some states and fell up to 6.7% in others during the first half of 2026. Data: Insurify mid-2026 report; national CPI: BLS. Chart: Dollar Lane (original).

State	Avg. full coverage, June 2026	Change, first half of 2026	Insurify projection for full-year 2026
Connecticut	$2,652	+10.5%	+14.7%
Kentucky	$2,302	+6.4%	+8.3%
West Virginia	$1,833	+4.7%	+7.9%
Illinois	$1,930	+4.1%	+5.6%
Nevada	$3,039	+4.0%	+5.7%
Massachusetts	$1,690	−4.8%	−3.6%
New York	$2,840	−5.1%	−3.8%
New Jersey	$2,923	−5.3%	−3.9%
New Mexico	$1,632	−5.6%	−8.2%
Washington, D.C.	$3,880	−6.7%	−4.9%

Source: Insurify. Projections are Insurify estimates and may not match what any one insurer files.

A few patterns stand out:

• Cheap states are catching up. Insurify found that seven of the 10 states with the biggest first-half increases started the year below the national average. Kentucky went from $58 below the average to $65 above it.
• Some expensive markets are easing. D.C., New York and New Jersey all fell at least 5%, though D.C. remains the most expensive place in the country at $3,880 a year. Maryland ($3,646), Rhode Island ($3,611), Michigan ($3,229) and Georgia ($3,109) round out the top five.
• Florida turned around. Insurify shows Florida's average full-coverage cost down 4% in the first half of 2026, and Bank of America found median insurance payments down about 7% to 8% in Orlando, Tampa, Jacksonville and Miami.
• California and the Northeast are still rising in the Bank of America payment data. Its big California metros posted the largest payment increases in the country, which the report links largely to wildfire losses.

State rules are changing, too. Insurify reports that Illinois lawmakers passed reforms in May giving regulators more authority over rate increases. Those reforms would require auto insurers to give at least 30 days' notice before raising a renewal premium by 10% or more, starting July 1, 2027. If you're not sure what your state requires you to carry, our guide to liability limits and coverage types covers the basics.

Who is still getting hit

Falling averages are cold comfort if you're in one of the groups still paying more. The data points to a few:

• Young adults. Bank of America found Gen Z insurance payments rose almost 6% in both 2025 and 2026, after 7% in 2024. Millennials and baby boomers saw increases of about 2%, and Gen X about 1%. If you're adding a new driver this year, our teen driver insurance guide covers the discounts that help most.
• Drivers with poor credit. NerdWallet found rates for its poor-credit profile rose 37.7% over three years, the steepest of any profile it studied, compared with 32.3% for good drivers. Insurers can use credit-based insurance scores in every state except California, Hawaii and Massachusetts, according to NerdWallet. Improving your credit can lower your premium at the next re-rate, and our credit score guide explains which factors move fastest.
• Drivers with violations. In NerdWallet's analysis, annual rates for a driver with a recent DUI climbed $1,183 from January 2023 to January 2026. NerdWallet also found that "nonstandard" insurers, which specialize in higher-risk drivers, are still filing increases on most of their policies, with median filed changes as high as 5.2%.
• Higher-income households. Bank of America found payments rose about 1.5% for higher-income customers, while lower-income households paid slightly less. The likely reason is that wealthier households keep adding cars and property to insure.

Why your renewal may not reflect the drop

This is the part most drivers miss. When an insurer cuts rates, it often targets the price new customers see first. Existing customers may get a smaller cut, no cut, or a cut offset by other changes at renewal. NerdWallet's filing review found that from January through mid-August 2026, State Farm filed for increases on just 5% of its policies with a median change of 0%, while GEICO and Auto-Owners had median filed changes of −1.2% and −0.6%. Those are averages across a company's book of business, not a guarantee for your policy.

Your premium can also rise at renewal even when base rates fall, for reasons that have nothing to do with the market:

• An at-fault accident, a claim or a ticket from the past three years shows up on your record.
• You moved to a ZIP code with more claims, or a new driver joined your household.
• A discount expired, such as a new-customer discount, a good-student discount after graduation or a telematics trial discount.
• Your insurance credit score changed, in states where insurers can use it.
• You replaced your car with one that costs more to repair.

The National Association of Insurance Commissioners' auto insurance shopping guide puts it simply: each insurer uses different rating factors, so "it is likely your premium will be very different at each insurer. That is why it is so important to shop around!" NerdWallet's own testing backs that up. After a good driver gets a DUI, a different insurer becomes the cheapest in 61% of the more than 34,000 ZIP codes it checked.

Repair bills are the one cost still climbing: the CPI for vehicle maintenance and repair rose 5.8% in the year to September 2026, even as insurance prices fell. Photo: Gustavo Fring / Pexels (6870324), Pexels License.

How to shop your policy in about an hour

Start 30 to 45 days before your renewal date. That gives you time to compare quotes before the new premium kicks in. Renewal notice rules vary by state, so don't wait for the bill. Here's a practical order of operations.

Step 1: Pull your declarations page

Your declarations page lists every coverage, limit, deductible and discount on your current policy. You'll need it to compare apples to apples. Write down:

• Bodily injury and property damage liability limits (for example, 100/300/100)
• Uninsured and underinsured motorist limits
• Medical payments or personal injury protection (PIP), if your state uses it
• Collision and comprehensive deductibles
• Extras like rental reimbursement, roadside assistance and gap coverage
• Your current six-month or annual premium and every discount listed

Step 2: Get at least three quotes for identical coverage

The NAIC recommends getting at least three quotes and comparing the same or similar coverage at each company. Mix your sources: one direct insurer, one company that sells through captive agents, and an independent agent or comparison site that can quote several carriers at once. Use the same drivers, vehicles, VINs, annual mileage and garaging address for each. A quote that looks cheap because it quietly drops uninsured motorist coverage or raises a deductible isn't a real saving. Our UM/UIM coverage guide explains why that's one of the worst places to cut.

Step 3: Ask your current insurer to re-rate you

Call your insurer or agent with your best outside quote in hand. Ask them to re-run your policy with every discount you qualify for and to check whether a newer rate plan or policy tier is available. Ask directly whether any discounts dropped off at renewal. Sometimes the cheapest option is staying put with a corrected policy. Sometimes your current insurer simply can't match a competitor.

Step 4: Run through the discount list

The NAIC and the Insurance Information Institute list the most common ways to lower premiums. Ask about each one:

Discount or lever	Who it fits	Watch out for
Bundling auto with home or renters	Most households; Insurify says bundle discounts can reach 25%	Compare the bundled total with separate best prices
Usage-based (telematics) program	Low-mileage, daytime, smooth drivers	Some insurers can raise rates for risky driving
Low annual mileage	Remote and hybrid workers, retirees	Report mileage honestly; it affects claims
Pay in full or autopay	Anyone with cash flow to pay six or 12 months upfront	Don't drain your emergency fund to do it
Good student or student away at school	Households with young drivers	Grade or distance proof is usually required
Defensive driving course	Older drivers and some younger drivers, depending on state	Rules and eligibility vary by state
Safety and anti-theft features	Newer cars with automatic emergency braking, alarms	Make sure features are listed on your policy
Group or affinity membership	Alumni groups, unions, some employers	The group rate isn't always the lowest

Step 5: Switch the right way

If you switch, start the new policy before canceling the old one, so there's no gap. A lapse in coverage can raise future rates, and the NAIC notes rates are generally lower when you've kept a car insured continuously. Ask the old insurer for a refund of any unused prepaid premium, and update your lender if you have a car loan or lease. Keep the new insurance ID cards in your car and phone.

Worked example: what shopping can be worth

Here's a hypothetical example using national figures. Dana, 41, drives a four-year-old sedan with a loan, has a clean record and good credit, and pays about the Insurify national average of $2,237 a year for full coverage with $500 deductibles. Her renewal arrives with a small increase. Here's how three moves could add up:

1. Shop identical coverage. Suppose a competitor quotes 12% less for the same limits and deductibles. That saves about $268 a year. Insurify says drivers with similar backgrounds can see full-coverage quotes vary from $100 to $200 a month, so a gap like this is plausible, but your results will depend on your ZIP code and record.
2. Raise the deductibles to $1,000. NerdWallet found a $1,000-deductible policy is 12.8% cheaper on average than one with a $500 deductible. Applied to her new $1,969 premium, that's about $252 more a year.
3. Bundle renters insurance or enroll in a telematics program if the insurer offers a meaningful discount. We'll leave this out of the math because discounts vary so widely.

Together, the first two steps could cut Dana's cost from about $2,237 to about $1,717, a saving of roughly $520 a year. These are illustrative Dollar Lane calculations, not a quote. The point is that two calls and an hour of comparison can be worth more than the entire national price drop.

The deductible break-even

Raising a deductible from $500 to $1,000 means you'll pay up to $500 more out of pocket if you file a collision or comprehensive claim. If the higher deductible saves you $286 a year (12.8% of $2,237), you come out ahead if you go about 21 months or more between claims ($500 ÷ $286 per year ≈ 1.75 years). The rule of thumb: only raise your deductible to an amount you could pay tomorrow from savings without using a credit card. Our auto deductible guide goes deeper, and if your car is older and worth little, see whether it's time to drop to liability-only coverage.

Where not to cut

When renewal bills are high, it's tempting to drop coverage to make the number smaller. Some cuts are sensible. Others can be financially devastating.

• Don't drop to state-minimum liability. The NAIC guide recommends buying "the most coverage you can reasonably afford," because you're personally responsible for damages above your limits. Many state minimums are far below the cost of a serious injury claim.
• Keep uninsured and underinsured motorist coverage. Insurify, citing the Insurance Information Institute, notes uninsured driver rates of 22% in Michigan and 23% in D.C.
• Keep comprehensive on a financed car. Lenders usually require collision and comprehensive until the loan is paid off, and comprehensive covers theft, hail and flooding. Repair costs are still rising, so a single hail storm can cost more than years of premiums.
• Do consider trimming extras you don't use, like duplicate roadside assistance you already get through a credit card, auto club or new-car warranty.

Car insurance renewal checklist

• ☐ Find your renewal date and set a reminder for 45 days before it.
• ☐ Download your current declarations page and note limits, deductibles, discounts and premium.
• ☐ Check your state's direction in the table above, but don't rely on it. Your quote is what counts.
• ☐ Get at least three quotes for identical coverage: one direct, one captive agent, one independent agent or comparison site.
• ☐ Call your current insurer with your best quote and ask for a re-rate and a full discount review.
• ☐ Ask whether any discount expired at renewal.
• ☐ Price a $1,000 deductible and check it against your emergency fund.
• ☐ Ask about telematics, low-mileage, pay-in-full and bundle discounts.
• ☐ Keep liability and UM/UIM limits at least where they are now.
• ☐ If you switch, start the new policy first, then cancel the old one in writing and request any refund.
• ☐ Put a reminder on your calendar to shop again before your next renewal.

FAQ

Are car insurance rates going down in 2026?

Nationally, yes, by some measures. The BLS motor vehicle insurance index was 5.0% lower in September 2026 than a year earlier. But quote data from Insurify shows the average full-coverage premium up about 1% in the first half of 2026, with increases in 27 states. Whether your rate goes down depends on your state, insurer and record.

Why did my premium go up when prices are falling?

Common reasons include a recent claim or ticket, a new driver or car, a move, an expired discount or a change in your insurance credit score where allowed. Your insurer may also have cut prices for new customers more than for renewals. Ask your insurer to explain the change line by line.

How often should I shop for car insurance?

Insurify notes that experts recommend comparing once or twice a year. At minimum, shop before each renewal and after any big change, like moving, buying a car, adding a driver or a ticket aging off your record.

Does getting car insurance quotes hurt my credit score?

Insurers generally use a "soft" credit inquiry to generate an insurance score, which doesn't affect your credit score the way a loan application can. If you're unsure, ask the insurer what kind of check it uses.

Will switching insurers mid-policy cost me?

Most insurers refund unused premium when you cancel, but some charge a cancellation fee or calculate refunds differently. Ask before switching. Never let coverage lapse between policies, since a gap can raise future rates.

Is usage-based insurance worth it?

It can be if you drive few miles, avoid late-night driving and brake gently. The NAIC says insurers usually give a small discount just for enrolling. But NerdWallet warns that rates won't always fall, and depending on the insurer, risky drivers may see their rates go up.

Will rates keep falling in 2027?

No one knows. Repair costs are still rising faster than inflation, and Insurify projects 32 states will finish 2026 with higher rates. Treat today's competitive market as a reason to shop now rather than a reason to wait.

Bottom line

The national car insurance numbers have finally turned, with prices down 5% from a year ago and payment growth near zero. But insurers don't usually hand those savings to loyal customers automatically. Spend an hour before your next renewal: pull your declarations page, compare at least three quotes for the same coverage, ask your current insurer to re-rate you, and choose a deductible your savings can cover. Keep your liability and uninsured motorist protection strong, and let the competition among insurers work for you.

Sources

• Government and regulators: BLS CPI detailed table, September 2026; BLS motor vehicle insurance index (CUSR0000SETE); NAIC: A Shopping Tool for Auto Insurance.
• Research and data: Bank of America Institute, "Insurance costs hit the brakes" (Oct. 16, 2026); Insurify mid-2026 car insurance report; NerdWallet 2026 Auto Insurance Rates Report; Experian average cost of car insurance; Perr&Knight Q2 2026 state filings; Insurance Information Institute: ways to lower auto insurance costs; III auto insurance facts and statistics.
• News: Insurance Business on the Bank of America report and LexisNexis filing data (Oct. 16, 2026).

Disclaimer: Dollar Lane publishes general U.S. personal-finance education for a USA audience. It is not insurance, legal or financial advice. Premium examples are simplified Dollar Lane illustrations based on published averages as of Oct. 17, 2026, not quotes. State averages and projections come from third-party data and vary by insurer, ZIP code, vehicle and driver. Coverage requirements differ by state, so confirm details with a licensed agent, your insurer or your state insurance department before changing a policy.