State of Auto Insurance in 2026

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.

Car insurance prices can vary dramatically from one state to the next. Full coverage insurance in the most expensive state, Nevada, costs more than two and a half times more than a policy in the cheapest state, Vermont.

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. That's a difference of more than $100 per month.

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.

Drivers across the country will see an average increase of less than 1% in 2026. But depending on the state, rates may increase by over 10% or drop by about 6%.

New Jersey drivers could see their car insurance bill go up by an estimated 10.46% when they renew their policies in 2026. That's a much higher rate increase than drivers in most other states will likely see.

People living in Nevada, California, New York and Washington, D.C., are also likely to see a significant increase in their car insurance bills when they renew. All four locations are estimated to raise car insurance rates by over 5% in 2026.

States with the highest estimated rate hikes in 2026

More than half of states are expected to see car insurance rates drop in 2026. Iowa has the largest estimated rate decrease, at 6.19%.

States with the largest estimated rate decreases in 2026

Whether your car insurance rates will go up or down when your policy renews in 2026 will also depend on your insurance company.

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.

Midsize insurance companies are likely to raise rates more than major companies in 2026.

NJM customers may see their rates go up by an average of 21.18% at renewal. Rates at Erie are expected to rise by 7.92%, while Plymouth Rock is expected to raise rates by an average of 6.24%.

Full coverage insurance costs about $214 per month for the RAV4 and CR-V, which are both compact crossover SUVs. That's 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. Full coverage for the Model Y costs an average of $354 per month.

Brand new cars generally cost more to insure than older models because they cost more to replace after a major crash. In addition, newer cars tend to have expensive technology, which can lead to costly repairs.

But safety features like lane assist and blindspot detection can help offset the higher repair costs by reducing the likelihood of an accident.

The top nine EVs cost an average of $309 per month to protect with a full coverage policy. That's 18% more expensive than the same coverage for a gas-powered car. However, that gap is smaller than in 2025, when EVs cost 23% more to insure.

For example, a gas-powered Ford F-150 costs an average of $258 per month to insure, while the electric F-150 Lightning costs just 4% more, at $269 per month.

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 twice as much, at $477 per month.

In general, electric cars made by legacy manufacturers like Chevrolet, Honda and Ford cost about 49% less to insure than those made by EV-only companies, like Tesla and Rivian. This may be because replacement parts from these brands are easier to find, in addition to lower vehicle prices.

ValuePenguin has a mission to empower people with information and resources to help them make smarter financial decisions. Car insurance can be a difficult and time-consuming topic to understand. This report attempts to unmask some of the critical issues.

In crafting our analysis, we reviewed more than 29 million quotes for different drivers, adjusting for the factors that impact auto insurance premiums the most. ValuePenguin editors gathered rates from 56 insurance companies across the country.