Many Auto Insurers Slashing Rates as Claims Drop  January 14th 2026

Many auto insurers slashing rates as claims drop

Insurers nationwide are slashing vehicle insurance rates in response to a sharp reduction in claims.

The unusual trend is benefiting drivers from Florida to California, as well as several states in between. Experts had predicted that President Donald Trump's tariff strategy would increase vehicle insurance costs.

The rate cuts are merely another market response, said Maya Afilalo, auto insurance industry analyst and managing editor at AutoInsurance.com, albeit in an unusual direction.

"Prices are stabilizing now because insurers have finally regained the profits they lost in the post-pandemic years," Afilalo explained. "Those years saw increased claims, combined with inflation and supply chain disruptions, increasing the cost of those claims. Insurers were losing money — paying out more than they took in. As a result, companies increased premiums to offset the losses."

Last week, Louisiana Insurance Commissioner Tim Temple approved Progressive Security Insurance Co.’s request for a 6.6% average rate decrease on its over 270,000 private passenger auto insurance policyholders in the state, and Progressive Paloverde Insurance Co.’s request for a 4% average decrease on its nearly 200,000 policyholders. Progressive Security’s 6.6% decrease follows a 3.2% decrease the company filed in July 2025, Temple noted

Money in Your Pockets: Governor Hochul Proposes Measures to Bring Down Crushingly Expensive Auto Insurance Rates | Governor Kathy Hochul

Governor Kathy Hochul today announced a series of common sense reforms to bring down auto insurance rates and take action against bad actors whose fraudulent claims drive up costs for hardworking New Yorkers as part of her 2026 State of the State. The new proposals include a whole-of-government approach to crack down on auto insurance fraud. These proposals build on Governor Hochul’s efforts to make New York more affordable and put money back into the pockets of hardworking New Yorkers.

“Car insurance rates are just too damn high, especially at a time when families are feeling squeezed by the cost of living,” Governor Hochul said. “High car insurance rates don’t just impact drivers, they impact all New Yorkers when businesses pass on increased costs to customers. These reforms will crack down on fraud, help drive costs down and put money back in the pockets of hardworking New Yorkers.”

New Yorkers pay some of the highest car insurance rates in the nation — totaling just over $4,000 annually on average, nearly $1,500 above the national average. Car insurance rates are driven up by a combination of fraud, litigation, legal loopholes, and enforcement gaps, with staged crashes and associated insurance fraud inflating everyone’s premiums by as much as $300 per year on average according to some estimates.

To combat these organized criminal efforts, Governor Hochul is taking a whole-of-government approach to cracking down on auto insurance fraud. The Governor will reinvigorate the State’s Motor Vehicle Theft and Insurance Fraud Prevention Board, empowering it to redouble its efforts toward zealously investigating and prosecuting insurance fraud across the state. This will include directly tasking DFS, DMV, DCJS, and NYSP with a more proactive and coordinated approach to enforcement, including dedicated resources and staff at both DFS and NYSP focused on auto insurance, and ensuring coordination in law enforcement response. FULL RELEASE

FAIR Plan Enrollment Spikes 20K in 4th Quarter, Exceeding Total Policies Promised Under Commissioner Lara's Plan, Says Consumer Watchdog

The California FAIR Plan released new numbers showing enrollment continues to grow, adding 21,859 residential policies in the final three months of 2025. In contrast, six insurance companies that sought rate hikes under Insurance Commissioner Lara's "Sustainable Insurance Strategy" have said they will sell 8,111 new policies in areas dubbed "distressed" over the next two years.

"The FAIR Plan added more policies in the last three months than the Commissioner's strategy will add in the state in the next two years," said Consumer Watchdog executive director Carmen Balber. "We're still losing more coverage than we gain even as insurance companies use the new rules approved by Commissioner Lara to justify hundred-million dollar rate increases."

See the FAIR Plan Total Dwelling & Commercial Policies In Force here.

The FAIR Plan's high cost, low benefit policies, are a last resort for consumers who cannot find home insurance in the standard market. Its continued growth indicates the ongoing insurance crisis, said Consumer Watchdog.

One insurance company that never reduced its sales in California, Mercury, is responsible for a quarter of the promised new sales (2,107 policies). In fact, Mercury grew its business in California by over 40,000 policies since 2023. The Department of Insurance approved an $85 million, 6.9% home insurance rate increase for Mercury in December. CSAA also had a $75 million rate hike approved in December and did not have to commit to any new sales.