The national average increase in auto insurance rates has dropped to under 1%, marking the lowest year-over-year change since 2022, as per the latest report.
That 0.67% rise represents an average across the country, but individual states show a mixed picture—some experiencing significant hikes, others holding steady, and a few even seeing price drops. In contrast to the spikes of recent years, such as 11.57% in 2023 and 17.13% in 2024, this year’s increase feels notably less alarming.
Unfortunately, some states reported more significant increases than others, with New Jersey hit hardest at 10.46%. Following closely were Nevada at 6.42%, California at 6.13%, New York at 6.02%, and Washington, DC at 5.36%.
Among major insurance companies, Allstate, for instance, raised rates by 1.98%, while American Family jumped by 1.80%. In contrast, Progressive and a few others even managed to reduce their rates slightly, with notable drops from USAA and State Farm.
The economic policies and affordability measures from the Trump administration seem to have significantly influenced this year’s lowered rates.
With the implementation of lower immigration policies under Trump, we’ve seen various positive shifts—wages, for example, have gone up, while housing and transportation costs have decreased. This overall environment seems to have contributed to better earnings per hour for workers.
Another factor behind the drop in insurance premiums is a decline in used car prices. According to Carfax, luxury SUVs, for example, saw an average price decrease of over $1,040.
Used SUVs, pickups, hybrids, and EVs dropped close to $600 on average. Luxury cars had previously surged but saw a notable drop in prices recently, while regular sedans and hatchbacks also faced declines of around $200.
Insurance rates had been climbing partly due to a surge in auto thefts, primarily attributed to immigrant gangs during Biden’s term. By 2023, auto thefts were projected to impose an additional $277 million burden on insurance premiums.
Over the past few years, virtually every aspect of the automotive sector experienced rising costs, including oil, maintenance, and gasoline. Understandably, insurance premiums reflected this upward trend as well.
