Are Auto Insurance Rates REALLY Going Down?
By: Craig Novak, Insurance Hotline
Summer 2026 (Vol. 44, No. 2)
We see in the news, or on the endless advertisements, rates going down! Is it real? or is it a marketing ploy? If a carrier is one of the most expensive in a state, advertises rates coming down, does that mean anything to you?? the answer is NO! Their rate could still be higher than yours! When the announcement comes from AAA, people often think iot must be legit! Keep in mind AAA also sells insurance directly through AAA and its company affiliates! So, what is the reality???
It's a combination of both. Auto insurance rates really are coming down in many states, but insurers are also using that fact aggressively in their advertising to encourage people to shop.
Here's what's happening:
- Rates increased dramatically from 2022 through much of 2024 because of inflation, higher repair costs, expensive vehicle technology, medical costs, and more severe accidents.
- As insurers returned to profitability and inflation moderated, many companies began filing rate decreases or much smaller increases in certain states during 2025 and 2026.
- However, it's not happening everywhere. Rate changes are approved state by state, so one insurer might lower rates in Florida while raising them in Illinois.
The marketing angle is real as well:
- Companies know many consumers assume all insurance is still getting more expensive.
- If an insurer has recently lowered rates or become more competitive in a particular market, it's an ideal time for them to advertise 'rates are coming down' to get people to request quotes.
- Even if their overall rates are lower, that doesn't mean they'll be cheaper for every driver. Age, driving record, vehicle, ZIP code, prior insurance, and credit (where allowed) still have a major impact.
For someone like you, who is in the insurance business, you've probably noticed that some carriers that took large increases over the last few years are now trying to regain market share. It's common for insurers to:
- Reduce filed rates.
- Loosen underwriting guidelines.
- Increase advertising and agent incentives.
- Try to grow policies after a period of contraction.
So the advertising isn't necessarily misleading - many carriers have reduced rates - but it's also a strategic effort to capitalize on improved pricing and win back customers and prompt the consumer to shop!
In Florida, the picture is more mixed. Auto rate increases have generally slowed compared with the past few years, and some insurers have filed reductions or smaller increases, but Florida remains one of the more expensive auto insurance markets because of litigation, uninsured drivers, and repair costs. Same with New Your, Texas and California, all the largest states with the biggest populations!
Please call us at Novak Insurance if you would like to discuss your insurance!
Craig Novak: 440-914-0606