The Zebra: Transportation affordability in jeopardy due to gas, car, and insurance costs

The Zebra’s 2026 State of Insurance report finds that nearly every transportation cost factor for U.S. consumers has increased, adding up to around 17% of Americans’ annual expenses.

“When gas prices, car prices, and car insurance costs go up, the affordability of that transportation is in jeopardy,” The Zebra states in the report. “Unfortunately, in 2026 all three are up.”

It found that fuel prices are around $4 per gallon nationwide, the cost of a new car is around $50,000 (increasing 3.5% since this time last year), and the median annual cost of car insurance is $2,079. The report notes that some states are seeing median insurance costs over $3,000.

The Zebra’s report states that Americans spend around 2.69% of their incomes on car insurance, and Louisianans pay more than 5% of their average annual income on it. Wyoming residents pay the most affordable car insurance relative to percentage of income spent, at 1.47%.

Earlier this month, Insurify predicted that full-coverage auto insurance will increase in 32 states by year-end, projecting rates will end 2026 up 1% year-over-year. That shakes out to an annual average of $2,242, representing a 7-percentage-point swing in the national trend.

The annual average cost of full-coverage car insurance is $2,237 nationwide, up 1% since the end of 2025, according to Insurify.

The Zebra conducted an online survey with Savanta in April to which 1,500 U.S. vehicle owners responded. Thirty-one percent of respondents rated current U.S. economic conditions as good or very good. Fifty-five percent said they view their financial status as good or very good, while 62% said they think their financial state will be good or very good next year.

“Despite that confidence, consumers are still worried, with nearly two-thirds (63%) extremely or very concerned about inflation and rising prices,” the report states. “Additionally, nearly half (49%) are extremely or very worried about the cost of insurance.

“In 2026, the median cost to insure a vehicle is now $2,079 ($173 a month). That’s about the cost of the average two-bedroom apartment in the U.S. or the average cost of two months of groceries for a family of four. That’s high. However, it’s not significantly higher than the median cost the year before ($2,016), which is welcome news after many years of steep increases.”

According to the report, Louisiana has the highest median annual premium at $3,342, with Florida close behind at $3,334. Vermont, Wyoming, and North Carolina are the most affordable, all coming in under $1,400 a year. Nearly half the country has median annual car insurance costs under $2,000, the report states.

“After years of bad loss ratios followed by premium hikes, we saw a couple years of outrageously good loss ratios,” said David Seider, CCO of The Zebra, in the report. “This has now led to a hyper-competitive environment amongst insurance companies. They are spending a ton on marketing and dropping rates to stay competitive. More or less: the auto industry overshot its price correction in many geographies and rates are now stabilizing.”

The Zebra says many macroeconomic factors affect insurance nationally, including tariffs, inflation, repair costs, and supply chain issues for auto parts.

“However, the significant differences in cost by state speak to a key aspect of insurance: it’s a state-regulated industry,” the report states. “Each state has their own requirements and minimums, and each state approves how much insurance companies can charge.”

Seider adds: “There have been lots of state-by-state decreases for carriers this year. I expect to see some states have meaningful premium drops on a per-carrier basis. Take Florida, which went from being a no-go area to being one of the highest business-development priorities for carriers. Some of that is due to Florida’s tort reform, and some is because we had a quiet hurricane season last year.”

The report notes that auto insurance is required in most states, meaning it can’t be removed from most budgets.

“In areas with a higher cost of living, we expect all costs for housing, food, and transportation to be higher,” The Zebra says in the report. “However, when it comes to insurance, that isn’t always the case. Some lower-cost-of-living states experience higher rates for car insurance.”

In The Zebra’s survey, 38% of drivers with credit scores below 670 said the cost of owning, insuring, and driving their vehicle(s) is affordable, compared to 53% of all drivers surveyed.

“This makes sense, given their insurance premiums could be as much as double what someone with excellent credit would pay,” the report states. “These drivers are already being hit hardest by rising costs.”

Sixty-seven percent of respondents with credit scores under 670 said they chose to drive less often to cut costs compared to 57% of other consumers. Sixty-eight percent said fuel prices led them to cut other expenses compared to 54% of other consumers.

The report notes that Iowa, New Jersey, New York, Oklahoma, and Pennsylvania have pending legislation that would nix some non-driving rating factors.

Respondents were also asked in the survey how they would react to a 10% jump in their car insurance costs; 45% said they would reduce coverage or increase their deductible.

“More than a quarter of drivers (29%) would consider canceling or suspending their auto coverage entirely,” the report states. “This will only exacerbate the crisis of uninsured and underinsured motorists on the road.

“Gen Z and Millennial consumers are feeling particularly squeezed by insurance costs. More than half (53%) say their personal financial situation has significantly influenced their insurance spending, compared to just 38% of other consumers. And 48% of Gen Z say they would cancel their insurance altogether if it went up by 10%!”

The report adds that the cost difference between a $500 and $1,000 deductible is oftentimes around $200 per year.

Sixty-four percent also said that to save money, they plan to drive their current vehicle until it becomes too expensive or too difficult to repair.

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