Auto Insurance in 2025: What’s Going On?

The auto insurance industry continues to face rising costs in 2025. Premiums are still climbing due to inflation, higher repair costs, and new import tariffs. Vehicles with advanced tech are safer but more expensive to fix—driving rates up despite fewer accidents.

Consumers are feeling the pinch and shopping around more than ever. Auto insurance quote activity is up 16%, and many are switching carriers to find better deals.

Usage-based insurance (UBI) and subscription models are growing fast, offering personalized pricing and flexibility. Telematics and driving behavior tracking are helping safe drivers save money.

At the same time, insurers are embracing AI-powered claims, digital tools, and mobile experiences to improve service and efficiency. Legal action—like the new lawsuit against Tesla Insurance in California—signals growing scrutiny on how claims are handled.

Bottom line: Expect more digital innovation, smarter pricing models, and a continued focus on affordability as both insurers and drivers adapt to a rapidly changing landscape.