Automotive insurance rates fell last year after several years of increases, according to data compiled by insurance comparison shopping website Insurify.

The average 2025 annual insurance cost in the U.S. fell 6% to $2,144 after a more than 40% average annual insurance cost increase from 2022 to 2024. 

Insurers, back in profits last year after increasing policy rates since the pandemic, focused on adding customers, pricing policies competitively in many corners of the country, Insurify said. 

Some states saw even bigger drops than the national average, including two of the biggest, California and Texas, whose average fell 8%. There were fewer accidents in those two states last year, and Texas also saw fewer vehicle thefts, trends likely helping to tamp down insurance rates for policy holders there.

This year could be a different story across the U.S., though. Insurify projects more than a half percentage point increase in average annual U.S. auto insurance cost, and federal trade policy presents a wild card.

If U.S. trade tariffs on imports push up the cost of automotive parts, that could in turn drive up the cost of auto insurance claims, increased costs insurers could transfer to policy holders in higher rates, the company said.

“If that happens, companies will likely pass those higher expenses on to policyholders — and a 1% increase could turn into 4% in 2026,” said Insurify Senior Economic Analyst Matt Brannon.

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