Telematics and Trust: How Usage-Based Insurance Is Transforming ...
What if your car insurance reflected how you actually drive, not just who you are? That question is no longer hypothetical. In 2024, more than 21 million
www.carriermanagement.comAuto insurance prices are still rising in 2025–2026 but much more slowly than in the last few years, while usage-based (telematics) policies are moving into the mainstream.[1][2][3][4]
What’s happening with rates
- After very sharp hikes in 2023–2024 (around 12–17% nationally), average auto premiums are rising about 7.5% in 2025, and projected low single digits (around 1–3%) in 2026.[2][4][1]
- Some states still face double‑digit increases in 2025–2026 (for example New Jersey, parts of the Northeast, and states like Oregon, Maryland, and Utah), even as others see flat or falling rates.[4][5][2]
- The national average full‑coverage premium is projected around or slightly above the low‑$2,000s per year in 2025–2026, with states like Florida, Nevada, and Michigan among the most expensive.[5][2][4]
- Industry outlooks say the pricing environment is “softening” as insurers have largely caught up with past inflation and are now facing more competition in personal auto underwriting.[6]
Sample state patterns (2025–2026 projections)
| State example | Trend 2025–2026 | Notes |
|---|---|---|
| New Jersey | Large increases (15%+ in 2025) | Among steepest hikes nationally.[2][5] |
| Hawaii | ~6% up in 2025, ~1% projected in 2026 | Still relatively cheaper than many states.[5] |
| Oregon / Maryland / Utah | 9–21% increases by quarter in 2026 | Among highest projected Q1–Q2 hikes.[4] |
Why prices moved so much
- 2023–2024 hikes were driven by higher repair and replacement costs, more severe accidents, and insurer losses, which led companies to push through big rate filings.[2][6]
- By 2025, those increases helped restore profitability; loss ratios improved and underwriting results hit record levels for many large auto insurers.[6]
- With profitability stabilizing and some states pushing back on big hikes, analysts expect smaller, more targeted increases rather than across‑the‑board spikes.[7][1][6]
Growth of usage-based insurance
- Usage-based insurance (UBI) using telematics (apps, plug‑ins, built‑in car systems) has shifted from niche to mainstream, with over 21 million U.S. policyholders sharing driving data by 2024 and strong growth continuing.[3]
- These programs track things like mileage, time of day, hard braking and acceleration, speed, and sometimes phone use, then adjust discounts based on a driving score.[8][3]
- Competitive “best UBI” lists now compare major insurers on potential savings, how hard they penalize risky driving, and their overall pricing.[8]
What it means for drivers now
- Expect renewal quotes in 2025–2026 to be higher than last year, but if you saw big jumps already, future increases may be smaller than what you just experienced.[1][4][2]
- Shopping around, checking state‑specific trends, and considering a telematics/UBI program (if you drive safely and not at risky times) are now key ways to manage your costs.[3][5][8]
If you tell me your state and whether you drive a lot or a little, I can narrow this down to what’s most likely happening to rates for someone like you.