Auto insurance costs surged in recent years and remain a major expense, though multiple industry outlooks point to slower premium increases and improving underwriting results in 2025. We asked the experts a question on many people’s minds: Should I try switching carriers to save money on my auto insurance?
There are lots of factors that affect your auto insurance premium that have to do with you, like your claims and driving history, but there are also broader factors at work in the economy as a whole that can impact the price you pay for insurance. The most current national indicator, the BLS Consumer Price Index for motor vehicle insurance, showed persistent double‑digit year‑over‑year increases through much of 2024 before easing into late 2024 and early 2025 as loss trends began to stabilize.
Looking at recent cycles, insurers implemented substantial catch‑up rate increases in 2023–2024 as claim severity rose with parts, labor, medical costs, and total‑loss valuations. In 2025, many outlooks call for moderation of rate increases as prior hikes fully earn in and frequency stabilizes, but weather and repair-cost pressures mean premiums may still trend higher in some regions.
Latest market outlooks from the NAIC.
Why the cost of your auto insurance may increase
“Any large-scale disaster of any nature is often a tipoff that consumers might see a spike in their auto premiums although they may have not even been involved in a car accident,” says Chris Johnston, an attorney with Des Moines Injury Law.
It makes sense why a natural disaster would increase premiums because insurers have to pay out tons of money at once for related claims, but the stream of premiums in and payments out aren’t the only factors that impact an insurer. In recent years, severe convective storms (hail/wind) and localized flooding have produced widespread auto physical damage losses in several states, sustaining upward pressure on rates even as broader inflation cools.
An insurance company’s business is also affected by the investments it makes with paid premiums. With higher interest rates since 2023, net investment income has improved, which can temper — but not eliminate — pressure on premiums; loss‑cost trends (repair, medical, and weather) remain the primary drivers of personal auto pricing.
Insurers are in the business of calculating and pricing risk based on their best predictions, but sometimes the world can be utterly unpredictable. Johnston explains why that matters for auto insurance prices: “When something unexpected impacts the insurers, this can result in their reserves being depleted. One method for rebuilding those is increased premiums for all.” In practice, many carriers filed catch‑up increases in 2023–2024, and approval timelines mean some states are still earning those adjustments in 2025, creating uneven experiences by market.
How to lower your monthly payments right now
You may be able to get a break on your monthly payments simply by calling your insurer. Many carriers will work with customers on billing options, payment plans, or due‑date changes; you can also review deductibles and optional coverages for savings. Given elevated premiums, proactive shopping can also uncover better rates with comparable coverage.
You may also want to look into usage-based insurance programs to help you save money like Allstate’s Drivewise or pay-per-mile policies offered by national carriers; participation in telematics/UBI has climbed to roughly the high‑teens to low‑20% of new business for many insurers. The standalone Metromile brand has been absorbed and is no longer broadly offered in most states, so low‑mileage drivers should look at widely available national PAYD options.
“With hybrid work patterns and elevated premiums, it’s an excellent time to consider these programs if you drive less than average,” recommends John Espenschied, owner of Insurance Brokers Group.
Many low‑mileage drivers overpay under traditional rating; pay‑per‑mile models can align costs more closely with actual use. The standalone Metromile brand has been absorbed under Lemonade and is no longer broadly offered in most states.
When making your decision, look for something that will still be a good fit after you go back to your daily routine because switching insurers too often can reduce tenure‑based or bundling discounts and may raise costs over time.
Consider locking in your rates with a longer-term policy
While many industry outlooks point to moderating rate increases in 2025 rather than immediate declines, it doesn’t hurt to compare car insurance quotes right now to see if you can find a better deal.
Consider shopping around 30–45 days before renewal and, if available, taking a one‑year policy term instead of a 6‑month term to lock in your rate for longer; shorter terms expose you to re‑rating twice as often.
Johnston, however, cautions that when you switch, details can get lost if the process isn’t managed carefully. Make sure your new policy is active before canceling the old one, avoid any lapse in coverage, and verify vehicles, drivers, and lienholder information are correct.
Shopping online can help you compare accurately and reduce errors — standardize limits and deductibles across quotes, check for available discounts and telematics rules, watch for fees, and review insurer complaints and ratings. Pricing may stabilize further if loss trends stay contained, but regional weather risk and repair costs can still influence your bill.
