Auto insurance in 2026: what’s driving costs and how to prepare

Between record car prices and sky-high monthly payments, owning a vehicle in 2026 feels like stepping into the fast lane of financial stress. The good news? Industry experts say the double-digit insurance rate increases are finally slowing down, as seen in our 2026 rate report. The catch? Those old coverage limits may not go as far as they used to. Behind the changing premiums and coverage limits are forces like repair costs, inflation and shifting vehicle values. By understanding what’s influencing these changes, you can make smarter decisions about how you drive and how you’re covered.

Why car insurance costs are still climbing

It’s not just your imagination, everything about owning a car has gotten more expensive. The average price for a new vehicle now tops $50,000, driven by a shift toward larger SUVs and electric vehicles. Loan amounts are also up, with buyers borrowing over $42,000 on average and nearly one in five facing monthly payments above $1,000. And that’s before you factor in your insurance. Rising repair costs, parts delays and pricey tech like sensors and cameras all increase what insurance companies have to pay when a car is damaged, and that gets passed on to you. Add in higher tariffs on imported parts and more frequent severe weather events and suddenly those higher premiums make a lot more sense.

What to expect for 2026 auto insurance rates

Here’s the sigh of relief we’ve been waiting for: after years of double-digit increases, auto insurance rates in 2026 are expected to rise more slowly, generally staying under 10% in most regions. That’s because insurance companies have largely recovered from previous losses, bringing their profit margins back into balance. But slower growth isn't no growth. Many drivers still carry outdated coverage limits set years ago, which may no longer cover today’s larger claim costs. This is why it’s so important to review your coverage regularly, and consider adding umbrella protection  if you have assets to protect.

Specialty vehicles: from RVs to classics, what’s changing

Your lovingly restored classic car, brand-new RV or other specialty vehicle comes with emotional investment and high expectations. But they also come with unique risks. When damage hits, the cost of repairs can skyrocket. If your policy isn’t tailored to your vehicle’s true value and usage, you could be left covering more than you expected out of pocket.

This isn’t rare. Specialty vehicle owners, are seeing smaller insurance increases (typically under 10%), but they face unique risks. Supply chain delays, climate-related losses and limited repair shops all make coverage more important than ever. If you’ve got a motorcycle, camper or collector car, it’s worth checking whether your policy still fits the way you drive and store your ride.

Total cost of ownership: insurance’s quiet role

When you’re weighing a new car purchase, it’s easy to zero in on sticker price or loan terms. But auto insurance is a major part of your total cost of ownership, and skipping over it can lead to surprises. A $4,000 bump in vehicle price might catch your eye, but the wrong insurance policy can cost you just as much after a fender bender or hailstorm.

Especially if you’re financing an expensive vehicle, you want coverage that protects more than just your monthly payment. Think about replacement value, liability limits and what would happen if your car was totaled next week. Getting this part right today means fewer headaches tomorrow.

Smarter insurance: connected cars and usage-based pricing

Today’s vehicles don’t just drive, they talk. Thanks to telematics and in-car sensors, it is easier than ever to tailor your policy to how, when and how far you drive. This means safer drivers can save and infrequent drivers can avoid overpaying.

Usage-based insurance (UBI) takes it a step further by using real-time data to set premiums based on actual behavior. Combine that with digital-first platforms that let you manage claims or compare quotes on your phone, and it’s easier than ever to match your policy to your lifestyle. Transparency is in and so is control.

What drivers can do today

While you can’t control inflation, parts shortages or shifting policies, you still have power. Your insurance decisions can make a big difference in how much you pay and how well protected you are. Here’s where to start:

• Review your current coverage – Make sure your liability limits and deductible match your real-world risks, especially if your vehicle or finances have changed.
• Explore discounts or UBI options – Ask your insurance company about usage-based pricing or safe driver rewards that reflect how you actually drive.
• Get expert help – A VIU by HUB advisor can walk you through your options, from bundling to umbrella coverage, so you’re protected without overpaying.

Every driver’s situation is different, but every driver deserves to feel confident about their coverage. Take a few minutes to check in on your policy today. If you’re unsure where to start, the VIU by HUB Advisory Team is here for you. Future You will thank you.