ValuePenguin, The Zebra make 2026 auto insurance predictions

ValuePenguin states in its latest “State of Auto Insurance” report that it expects car insurance prices to go up this year by an average of less than 1%, while The Zebra predicts 19 states will see an increase in auto insurance premiums.

“That’s the smallest year-over-year increase since 2022, before high inflation caused car insurance rates to skyrocket with increases of 11.57% in 2023, 17.13% in 2024, and 7.56% in 2025,” the ValuePenguin report states.

However, that depends on the state, as rates may increase by over 10% or drop by about 6%, according to the report.

ValuePenguin reports that the average cost of full coverage car insurance in the U.S. this year is $208 per month.

Auto insurance is expected to cost an average of $2,496 a year nationwide for a full coverage policy.

Nevada, Louisiana, and Florida are the most expensive states in the U.S. for full coverage car insurance. All three states are at least 50% more expensive than the national average.

Vermont, Maine, and Wyoming have the cheapest full coverage car insurance rates in the U.S. All three of these largely rural states have rates that are at least 37% cheaper than the national average.

States with the highest estimated rate hikes in 2026:

• •  New Jersey: 10.46%
  •  Nevada: 6.42%
  •  California: 6.13%
  •  New York: 6.02%
  •  Washington, D.C.: 5.36%

States with the largest estimated rate decreases in 2026:

• •  Iowa: 6.19%
  •  Minnesota: 5.29%
  •  Arkansas: 4.70%
  •  Missouri: 4.45%
  •  Illinois: 4.26%

Major insurance companies aren’t expected to raise rates significantly in 2026. In fact, five of the 10 largest car insurance companies in the U.S. are expected to lower their car insurance rates.

Allstate has the largest estimated rate hike among major insurance companies, but it is a modest increase of just 1.98%. On the other hand, drivers insured with State Farm could see a decrease of around 4% when they renew their policies in 2026.

By vehicle make and model, the Toyota RAV4 and Honda CR-V are the most affordable new cars to insure in 2026, which is around 14% less expensive than average among the most popular 2025 models.

The most expensive new car to insure in 2026 is the Tesla Model Y, with full coverage costing an average of $354 per month.

In the electric vehicle category, the Chevrolet Equinox EV is the cheapest new model to insure, at $226 per month. Insurance for the most expensive model, the Rivian R1S, costs at $477 per month.

The report also notes that shopping around can save some drivers more than $500 per month, with as much as a 406% price difference between the cheapest and most expensive insurer for the same level of coverage.

As for insurance trends, ValuePenguin found that vehicle thefts and fatal accidents are currently down, and tariffs haven’t caused insurance rates to go up as much as expected.

The Zebra has also released a “State of Insurance” report, including its Dynamic Insurance Rating Tool (DIRT), which projects that during the first two quarters of 2026, 19 states will see an increase in auto insurance premiums, while 13 may see a decrease.

“These findings come after average auto insurance premiums rose 3% nationally from 2024 to 2025, compared to a drastic 18% jump the previous year, suggesting rates may be stabilizing,” a press release states. “In 2026, The Zebra projects the typical American driver will pay $2,256 on average in annual auto insurance premiums.”

David Seider, The Zebra’s chief commercial officer, adds, “Americans are facing rising auto insurance costs due to various factors, including economic pressures, population growth in dense areas, and severe weather. While competition and targeted rate reductions give consumers opportunities to save, most renewals will remain high. If the economy weakens, insurance could take a growing bite out of take-home pay, prompting more frequent shopping for better deals – or even causing some to forego coverage altogether.”

The Zebra has also launched its Premium Pressure Index (ZPPI), a proprietary metric comparing insurance premium data against broader economic indicators, according to the release. ZPPI provides a more comprehensive view of not only the cost of insurance, but affordability. For example, Americans are spending 2.65 of their annual income on auto insurance, according to the ZPPI.

The ZPPI also shows that residents of Arkansas, Louisiana, and Florida are spending nearly 5% of their annual income on auto insurance.

Vermont, Minnesota, and Mississippi are expected to see auto insurance decreases of 6-13%, while Oregon, Maryland, and Utah are forecasted to see 8-21% increases.

Six states (Louisiana, Nevada, New York, Georgia, Maryland, and Utah) saw an increase of over 50% in insurance prices from 2024 to 2025).

The report states that, on average, texting while driving leads to a 17% premium increase.

Among non-luxury brands, the Nissan GT-R is the most expensive model to insure at nearly $400 per month. The Ford Bronco is the least expensive model to insure at $76 per month, according to the report.

“Auto insurance isn’t one‑size‑fits‑all, and rates can vary dramatically depending on who you choose to insure with,” said Seider in the release. “That’s why it’s so important for consumers to shop around and compare quotes. Doing so can save money and help people find coverage that fits both their needs and their budget.”

Images

Featured image credit: Thai Noipho/iStock