While 32 states are seeing auto insurance premiums drop in 2026, New Jersey motorists are heading in reverse, dealing with the nation’s largest rate increase for the second straight year, according to a report from ValuePenguin and Lending Tree.
The State of Auto Insurance 2026 report found that New Jersey insurers are raising premiums by 10.46% in 2026 — the only state with a double-digit increase. Nationally, insurers are lifting rates by 0.67%.
Rob Bhatt, an insurance expert and licensed insurance agent working with ValuePenguin and Lending Tree, said a major driver behind the auto insurance hikes in the Garden State is New Jersey’s mandated increase to minimum coverage requirements that are taking effect in 2026. This will push premiums up for many drivers, especially those currently carrying minimum-limit policies.
He also said this year’s rate increases are resulting from more accidents on New Jersey’s crowded roads, inflated medical claims, prolonged legal disputes and fraud.
After New Jersey, Nevada (6.42%), California (6.13%), New York (6.02%) and Washington, D.C. (5.36%) have the highest estimated auto insurance rate hikes.
Bhatt said that after years of increases that pushed premiums to record highs, insurers are lowering rates in several states. About 50% of the largest insurers have announced rate cuts, largely tied to improved loss ratios, a drop in vehicle thefts and fatal accidents, and tariffs having a smaller impact than anticipated.
Some Midwest and southern states are getting a break in rates in 2026. Iowa is the state with the largest estimated rate decrease at 6.19%, followed by Minnesota (5.29%), Arkansas (4.70%), Missouri (4.45%) and Illinois (4.26%).
New Jersey’s average cost of auto insurance is expected to reach $249 per month in 2026, ranking the state among 10 most expensive for car insurance. The nationwide average cost of car insurance for 2026 is $208 per month, or about $2,496 per year, for full coverage.
Nevada ($335 per month), Louisiana ($327) and Florida ($311) are the most expensive states in the U.S. for full coverage car insurance. All three states are at least 50% more expensive than the national average, a difference of more than $100 per month.
Vermont ($128 per month), Maine ($129) and Wyoming ($131 per month) have the cheapest full coverage car insurance rates in the U.S. All three of these mostly rural states have rates that are at least 37% less expensive than the national average.
Major insurance companies aren’t expected to raise rates significantly in 2026, according to the report. In fact, five of the 10 largest car insurance companies in the U.S. are expected to lower their car insurance rates.
Midsize insurance companies are likely to raise rates more than major companies in 2026.
Auto insurance rate change data was compiled using RateWatch from S&P Global, which uses annual information from the National Association of Insurance Commissioners (NAIC).
Quotes are for a 30-year-old man who drives a 2018 Honda Civic EX with good credit and a clean driving record, unless otherwise noted. Quotes include the largest companies in each state from all available ZIP codes.
All insurance quotes were gathered between October and December 2024.
ValuePenguin’s analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurer filings and should be used for comparative purposes only, as an individual’s quotes may differ.
