The June consumer price index came out last week, and one line in it should change what you do with your next car insurance renewal. The BLS index for motor vehicle insurance was 4.1% lower than in June 2025. After the run-up of the past few years, prices for car insurance are falling. You won’t necessarily see that drop, though, because insurers don’t hand rate cuts to every existing customer automatically. If you want lower car insurance rates this year, you probably have to shop for them.
The industry data says the same thing. In the first quarter of 2026, LexisNexis Risk Solutions counted more rate decreases than increases among the 25 largest auto insurers: 42% of their rate filings were cuts, averaging about 5%, versus 26% that were increases. Yet J.D. Power found that only 13.6% of auto customers shopped their coverage in the first quarter, and just 4.2% switched.
Why falling car insurance rates don’t reach your renewal
When an insurer files a rate decrease, it often applies to new business or to specific groups of drivers. Your renewal is priced on your current policy, your claims history, and the company’s own retention models. An insurer that knows you rarely shop has less reason to pass the full cut along to you.
That’s not a conspiracy. It’s how pricing works when most customers don’t compare. The LexisNexis data shows a market moving in two directions at once: across all carriers in the first quarter, 35% of rate revisions were decreases averaging 5.1%, while 39% were increases averaging 3.9%. Which group your policy lands in depends on your insurer and your state, and the only way to find out is to see what other companies would charge you today.
The average premium is still high. The National Association of Insurance Commissioners’ latest database report, released in February, put the combined average premium at $1,438 per vehicle in 2023, up 14.42% in a single year. Prices have a long way to fall before they get back to where they were, which is all the more reason to make sure you’re getting the drop that’s available.
A worked example: three possible renewals
Start with the NAIC’s 2023 average of $1,438 for a year of coverage. Here’s what your next renewal could look like under three outcomes drawn from the 2026 data.
| Renewal outcome | New annual premium |
|---|---|
| Your insurer raises you by the average increase (3.9%) | $1,494.08 |
| Your price follows the CPI (down 4.11%) | $1,378.90 |
| You switch to a carrier that cut rates by the average decrease (5.1%) | $1,364.66 |
If your renewal goes up 3.9% while the market falls, you pay $1,494.08 instead of $1,378.90, a $115.18 gap for the year. If you move to a carrier whose rates came down by the average 5.1%, the gap is $129.42. These are averages applied to an average premium, so your own numbers will be different, and possibly much bigger. J.D. Power reports that the median premium among customers who switched auto insurers early this year was more than $3,200, so for many households a 5% swing is worth well over $150.
Those numbers are per car and per year, and they repeat at every renewal you let go by without checking. Three quotes is an evening’s work, and the result holds for a full policy term.
Shop at the right time, with the right information
The best time to compare is three to four weeks before your renewal date, after your insurer sends the renewal offer. You’ll know exactly what you’d pay to stay, and you’ll have time to switch without a gap in coverage. Have your current declarations page ready so every quote uses the same liability limits, deductibles, and drivers. Comparing a quote with lower limits against your current policy doesn’t tell you anything useful.
Get quotes from at least one insurer that sells through captive agents, one that sells direct, and one independent agent who can check several companies at once. Ask each one about discounts you might not have: bundling with renters or homeowners coverage, paying in full, paperless billing, or a telematics program that tracks your driving. If you’re happy with your current insurer, call them with the best competing quote and ask whether they can match it. Sometimes they can.
Before you cancel the old policy, make sure the new one is active and that you have the new ID cards. Cancel effective the same day the new coverage starts, and ask for a refund of any unused premium if you paid in full. A lapse of even a few days can follow you, because insurers price new customers partly on whether they’ve had continuous coverage, and the next time you shop, that gap may cost you more than the switch saved.
LexisNexis found that 47.3% of policies in force had been shopped at least once in the prior 12 months, a record. That means plenty of drivers already compare regularly. If you’ve renewed twice without looking, you’re likely in the group that’s leaving money on the table.
Check your collision coverage on an older car
Shopping is one lever. Your coverage is the other. The NAIC’s average collision premium was $463.71 nationally in 2023, ranging from $312.87 in Iowa to $663.87 in Washington, D.C. Collision pays to repair or replace your own car after an accident, minus your deductible, and it never pays more than the car is worth.
Say your car is worth $6,000 and you carry a $1,000 collision deductible. The most collision coverage could ever pay you is $5,000. At the national average premium, you’d pay for about 10.8 years before your premiums added up to that maximum payout, and the car will be worth less every year in between. Collision is costing you 7.73% of the car’s value annually.
There’s no single right answer. If you couldn’t replace the car out of savings after a wreck, keep the coverage, or raise the deductible instead of dropping it. If you have a solid emergency fund and the car is worth a few thousand dollars, dropping collision may make more sense. Keep in mind that if you still have a loan or lease, the lender almost certainly requires it.
Make shopping a habit at every renewal
The cycle that pushed premiums up for three years is reversing, and the drivers who benefit first are the ones who ask. Put a reminder on your calendar a month before each renewal. If you have a homeowners policy, the same logic applies there, and the earlier guides to flood insurance’s 30-day waiting period and to the types of insurance you actually need can help you decide what to review at the same time.
Falling car insurance rates are good news only if they show up on your bill. Compare quotes before your next renewal, check whether your collision coverage still makes sense for your car, and switch if the savings are real. Coverage rules and pricing vary by state and by driver, so a licensed insurance agent can confirm what fits your situation.
Sources: BLS CPI, motor vehicle insurance index; NAIC 2022/2023 Auto Insurance Database Report; Repairer Driven News on LexisNexis and J.D. Power first-quarter 2026 data
