Andrew Keshner
Here's why car-insurance prices will continue to weigh heavily on drivers, likely prompting them to make more high-stakes bets next year
As rising auto-insurance costs collide with a broader affordability crisis, many drivers are shouldering more obligation and more risk when buying protection for the roads.
For more than a year, Kelly said a prayer every time she started her car.
She had to criss-cross Houston for work and there was no time to spare. When she buckled up in her Volvo sedan, she would say something like this:
&#34;God, watch out for me right now because here I go again in this car that has no insurance. Please make sure that nobody hits me, make sure that I'm safe, and I appreciate it.&#34;
Since a September police ticket for driving without insurance - which is illegal in most states - Kelly's prayers have changed. Only slightly. Now she has bare minimum auto coverage, which might not cover her car in an accident.
Now she asks, &#34;Please just make sure that I am aware of my surroundings and everyone is aware of me so that I can get there safely and nothing happens to me or my passengers or my vehicle because I can't afford it. I can't afford it, Lord.'&#34;
Her prayers reflect the sharp end of a bigger dilemma many Americans face, as rising auto-insurance costs collide with a broader affordability crisis. Many drivers have chosen their path: They are shouldering more obligation and more risk when buying protection for the roads - all to manage their monthly costs.
Amid record-high rates of drivers shopping around for new policies, more policyholders are paying higher deductibles. When accidents happen, more drivers are personally paying for repairs instead of filing claims that could push up their premiums. A growing share of drivers have too little coverage - or none at all. There's even evidence that in extreme cases, more people are defrauding insurance companies to try to get cheaper coverage.
Though auto-insurance prices are projected to level off in 2026, lower insurance-company profits may push more costs onto consumers.
As more drivers on the road assume more risk, insurers may have to add that price into the cost of covering their own customers. It's a cycle where heightened risk and heightened prices can feed off each other.
For decades, Kelly, in her early 40s, viewed auto insurance as a &#34;non-negotiable&#34; expense. But she lost her job after Hurricane Beryl in July 2024 and eventually let her coverage expire to control her costs.
When Kelly found her current job working with clients with mental-health needs, she wanted to resume coverage with her insurer, Progressive. But even with a discount from a three-year safe-driving record, her coverage lapse and a bad credit score pushed her quoted premium to $476 a month.
That would have been a more than 80% increase from her previous $263 monthly premium for full coverage. It would have been untenable in a budget where bills and housing already ate up more than half of her monthly take-home pay. Besides, that was nearly the cost of the $605 monthly loan payments on her seven-year-old Volvo. Progressive did not respond to a request for comment.
&#34;That was when it became very clear to me that if I buy myself insurance, I'm literally not going to be able to go grocery shopping for my daughter and me to eat dinner at night. And I'm sorry but I just can't, you know. I'm not going to not feed my child so that I can have insurance.&#34;
'I'm not going to not feed my child so that I can have insurance.'
Drivers in Texas and every state except New Hampshire are legally required to have car insurance.  (Granite State drivers have to show financial responsibility in the event of an at-fault accident.)
Returning from a client visit, a police stop over a non-visible registration sticker led to Kelly's ticket and, ultimately, her new policy. Her liability-only coverage pays for another car's damage if she is deemed at fault. It costs $215 a month, which is slightly cheaper than her previous policy - but it provides a fraction of the coverage she once had.
MarketWatch is withholding Kelly's full name for privacy reasons, but viewed her insurance records and a record of her police ticket.
During the more than 12 months she didn't have coverage, Kelly was one of the growing number of Americans who go without auto insurance. As of 2023, more than 15% of drivers had no insurance, according to the latest data from the Insurance Research Council, an organization supported by property- and casualty-insurance companies and associations. The share of drivers without insurance climbed from 2019 to 2023, the Insurance Research Council data showed.
During that same period, the average annual cost for comprehensive car insurance went from $1,207 to $1,438, according to the National Association of Insurance Commissioners.
As a new year dawns, drivers still face worries about the size of their insurance bills, on top of concerns about whether they're adequately covered. It's likely there's no going back anytime soon, experts say.
&#34;We're playing whack-a-mole with problems and solutions,&#34; said David Seider, chief commercial officer of TheZebra.com, a site to shop for auto-insurance coverage.
Drivers can raise their deductible to lower their monthly bill - but can they afford to pay when accidents happen? Newer coverage models like pay-per-mile pricing can be cheaper - but can a driver stay under the limit?
If household income can't keep up with insurance costs, Seider doesn't expect the trends to reverse next year. &#34;We just don't see the indications that anything is going to come down that much,&#34; he said.
&#34;A significant downturn in premiums across the board is very unlikely,&#34; said Gerry Glombicki, a senior director in Fitch Ratings' North American insurance group.
Americans broke records in 2024 with how much they shopped around for new auto-insurance policies, according to LexisNexis Risk Solutions. 2025 could wind up topping 2024.
Premiums may decline slightly in 2026, judging from the filings that major insurers sent to state regulators, said Jeff Batiste, senior vice president and general manager for U.S. auto and home insurance at LexisNexis. But &#34;that still is not getting relief fast enough to consumers,&#34; he said. He's expecting elevated rates of shopping around to continue into 2026 as drivers hunt for better deals and insurers vie for customers.
Kelly is searching for better coverage at a better price in 2026. But she's skeptical she'll find it, which means she'll have to keep praying with every ignition. Here's why car-insurance prices will continue to weigh heavily on drivers, likely prompting them to make more high-stakes bets next year.
Car repairs aren't getting cheaper in 2026
Car-insurance premium increases eased this year compared to the extended surges of 2023 and 2024. But that just means the increases occurred at a more moderate rate; it didn't make coverage any cheaper.
Consider a cracked windshield. Fixing one used to mean installing new glass, rubber gaskets and adhesive. With today's more sophisticated vehicles, there are often cameras and sensors that have to be removed and possibly replaced. There are &#34;more and more features that add to the cost of repair,&#34; said Bob Passmore of the American Property Casualty Insurance Association, a trade group.
When carriers determine premiums, their core focus is the estimated repair cost, said Passmore,  the group's department vice president for personal lines. From 2020 to 2025, insurers saw a 40% increase in the cost of auto parts and that translated into a 20% increase for the cost of repairs, he said. As inflation surged and drivers returned to the road after the pandemic, insurers hiked premiums to cover their costs and the risk of more expensive repairs.
&#34;Those costs aren't going down. They are just not increasing as rapidly as they were,&#34; Passmore said, later adding, &#34;in terms of the cost to repair new vehicles, this is probably the new normal.&#34;
Also contributing to higher costs are the Trump administration's tariffs. The insurance trade group projects drivers and the industry may have to absorb between $16 billion and $31 billion in extra claims costs over the next 12 months.
The extra gadgets in today's cars are often meant to decrease collision risk, which would theoretically lower the chance of insurance involvement. &#34;I'm not sure that has really worked its way through the numbers yet,&#34; Glombicki said.
There were fewer property-damage and collision claims through the third quarter, compared with 2022, according to LexisNexis Risk Solutions. But the cost of these claims, and their &#34;severity,&#34; has increased over that time.
Of course, someone needs to know how to make these sophisticated repairs. A mechanic's labor accounts for 60% to 70% of a claim's cost, Glombicki said.
Yet trained technicians are in short supply. There's a yearly shortfall of approximately 37,000 trained technicians, according to the National Automobile Dealers Association. &#34;To repair a car in 2026 is going to be more expensive than in 2025, just by labor costs,&#34; Glombicki said.
Drivers are paying higher deductibles
Drivers are increasingly putting themselves on the hook to pay more before their insurance carrier steps in to write a check, according to data and experts. Signing up for a plan with a higher deductible is one way to lower monthly premiums.
Americans had an average car insurance deductible of $831 as of early December, up from $619 in 2019, according to data from Mitchell International, a software provider for insurance companies and collision repair shops. The average deductible is up nearly 2% since the start of 2025.
Deductible averages likely will not dip below $800 next year, said Ryan Mandell, vice president of strategy and market intelligence for Mitchell International, an collision-claims software company.
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<p>Rising auto-insurance costs are forcing many Americans to make risky trade-offs, such as driving uninsured or with minimal coverage, to manage monthly expenses. This trend is part of a broader affordability crisis, with more drivers paying higher deductibles and personally covering repair costs. The Insurance Research Council reports over 15% of drivers were uninsured in 2023, a figure that has risen since 2019. Auto-insurance prices are expected to stabilize by 2026, but lower insurance-company profits may continue to burden consumers.</p>

More uninsured drivers, more unfixed damage: Soaring car-insurance prices have pushed Americans into risky trade-offs