Average auto insurance costs in the United States declined by nearly 5% between January 2024 and December 2025, Freeway Insurance reported, in what may be the strongest signal yet that a prolonged cycle of rising insurance premiums is beginning to ease.
The finding, drawn from a report published in the first quarter of 2026, is based on what customers actually paid for coverage — policy purchase transactions — rather than the quoted or estimated rates that underpin most industry analyses. Freeway Insurance said the distinction offers a more accurate reading of real-world pricing conditions.
The steepest corrections appeared in states that had absorbed the heaviest increases in recent years. In Florida, average costs fell from $214 to $187, a decline of 13%, while Michigan recorded a drop from $193 to $171, down 12%. Texas posted a more modest decrease, from $172 to $162, a reduction of 6%.
The pricing shifts have coincided with record levels of policyholder movement. LexisNexis data showed auto insurance switching reached an all-time high in 2025, with 47.1% of policies in force having been shopped at least once in the prior 12 months.
Quarterly shopping growth hit 6.9% in the fourth quarter, suggesting consumers are acting on the changing market dynamics rather than absorbing higher costs.
Read more: Auto insurance switching hits all-time high
Yet the national trajectory remains far from uniform. The Zebra projects that insurance premiums will rise in 19 states and decline in 13 during the first half of 2026. Average auto insurance premiums rose 3% from 2024 to 2025 – a marked deceleration from the 18% surge the year before, but evidence that the correction has not reached every corner of the market.
Freeway Insurance said its transaction-based methodology enables it to surface trends in insurance premiums earlier than approaches built on rate estimates. The company operates as the largest personal lines auto insurance distribution platform in the United States.
