Car insurance costs climbed in the first half of 2026, reversing last year's declines, and a new report projects that drivers in more than 30 states will pay more by the end of the year. Because coverage is a legally required expense for most U.S. drivers, the turnaround feeds directly into household budgets rather than being a cost consumers can simply opt out of.

An analysis by Insurify found that car insurance premiums fell 6% in 2025, with drivers in 39 states seeing a decline in average full-coverage premiums. In the first half of 2026, however, the average cost of full-coverage premiums rose 1% to $2,237. Twenty-seven states have seen cost increases to date, and 32 states are expected to see increases by year's end. Full-coverage policies generally bundle liability protection with comprehensive and collision coverage for a driver's own vehicle.

"Unfortunately, this year, a majority of the states are trending up," Insurify CEO Snejina Zacharia told FOX Business in an exclusive interview. "The severity of weather conditions and the severity of accidents have continued to be very strong.

"On top of that, we have seen a 45% increase in repair costs. Repair costs are a major driver of costs in the claims and claims history for the insurance industry, so carriers are adjusting that on a state-by-state level."

Zacharia said the trend of higher repair costs began several years ago with the COVID pandemic and chip shortages, and costs have continued to rise amid the impact of inflation across the economy and tariffs on auto parts. Those pressures reach premiums unevenly because auto insurance is regulated at the state level, with carriers typically filing rate changes for approval state by state — the mechanism behind the adjustments she described.

Lower-cost states post the sharpest increases

Some of the sharpest increases this year have occurred in states that historically have relatively low insurance costs, Zacharia said.

Among the lower-cost states noted in Insurify's report was West Virginia, which saw a 5% increase in the first half of the year, while drivers in Kentucky went from paying $58 below the national average to $65 above the national average. Both Kentucky and West Virginia are expected to see rates rise 8% year over year, according to the projection for the end of 2026.

"The sharpest increase that we predict will be in the state of Connecticut, a small state where the state is expected to get a 15% year-over-year increase in its car insurance. Just looking back five years, the state of Connecticut has increased rates 67%, and the majority of the states unfortunately have seen dramatic increases across the board," she explained.

That five-year figure is a reminder that 2025's declines came after a multiyear run-up, so the renewed increases in 2026 leave many drivers paying well above where their premiums stood several years ago.

Where rates are falling

Some parts of the country saw rates decline in the first half of the year. Washington, D.C., was down 7% and is projected to end 2026 down 5% on a net basis from a year ago, though it still has the nation's highest average premiums, at an average full-coverage cost of $3,955. The decline in auto thefts and fatal crashes contributed to the decrease.

New Mexico's premiums were down 6% in the first half of the year, and that trend is expected to continue through the end of the year, finishing down 8% at a projected cost of $1,587.

New York and New Jersey were each down 5% in the first half of the year and are projected to finish 2026 down 4% year over year, with total costs around $2,900 each.

How consumers can lower their premiums

Zacharia said strategies consumers can use to obtain a lower insurance premium include increasing a deductible or making other changes to coverage within their policy.

"For example, if your vehicle is so old that the cost to insure it is almost more expensive than the cost to replace the vehicle, you probably don't need comprehensive and collision insurance because you will be paying almost as much year over year as your total vehicle cost," she explained.

"Also, every carrier will have different discounts for the customer, and this is another reason why it's important to shop. People often think that just because they've been with a carrier for 10, 15 years, that they're getting a loyalty discount," Zacharia said.

"Rates have been all over the place for so many of the customers across the board that you will never know how much is your fair rate or what is your best deal on your car insurance unless you have given yourself the ability to make that comparison apples-to-apples across top providers and some regional ones."

Zacharia said Insurify's platform collects available discounts from 120 auto insurance carriers and can provide unique rates specific to individual customers.