2026 Auto Insurance Trends
Auto Insurance Trends to Watch in 2026
Economic policies and evolving technologies affect not only the vehicle market, but the insurance industry too. Price increases and new features could mean higher auto insurance premiums as carriers adjust rate structures, repair networks, claims operations, and data capabilities. As we move through 2026, insurance industry analysts continue monitoring how these factors are impacting consumers over the year ahead.
Tariffs
Tariffs introduced in 2025 continue to influence vehicle repair costs in 2026. Tariffs targeting foreign automakers have led to price increases for items affecting car insurance claims, such as replacement parts, steel, and aluminum. Consequently, this can lead to increases in insurance premiums to offset rising repair costs. Whether tariff policies shift later in 2026 remains uncertain, but as the price of imported goods rises, insurance premiums may follow.
Electric Vehicles
In the last few years, electric vehicles have become more mainstream; in fact, Edmunds estimated EVs accounted for roughly 7.9% of vehicles on the road in February 2025, an improvement of 6.3 percentage points over the course of five years. However, there is a tradeoff — electric drivetrains are typically heavier than their fuel-burning counterparts. According to S&P Global, the average vehicle mass is expected to exceed 4,600 pounds by 2026. Greater mass changes the dynamics of car accidents as the likelihood of severe impacts at lower speeds is raised; while crashes are becoming less common, they’re also more expensive, and these rising repair costs will drive insurance premiums up as well.
Vehicle Automation
Autonomous vehicles haven’t become the “rapid leap” they were forecasted to be years ago, S&P Global reports, but the field is nevertheless progressing, albeit slowly. Level 2 and Level 2 Plus driver-assistance technologies — which include programs managing steering and speed — are becoming more common in newer vehicles; in fact, S&P Global estimates about 40% of global new vehicle sales will feature Level 2 Plus and Level 4 automation by 2035. While these new features are exciting for auto owners, insurance companies are faced with challenges in determining who’s at fault after an automated function fails. Such issues are becoming more complicated as carriers try to determine who’s liable. As insurers re-evaluate risk exposures and fault, it could affect how premiums are quoted in the future.
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