Insurance Inflation Index: Car insurance rates drop 

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Auto insurance prices, which had leveled off through the first four months of 2026, fell 1.7% in May 2026 — the sharpest monthly decline in this index’s recent history and a sign that the multi-year climb in rates has firmly reversed.

That’s a dramatic shift from early 2024, when premiums were rising at double-digit annual rates. Prices fell 0.4% in January and 0.3% in February, were flat in March and edged up 0.1% in April before dropping sharply in May. After months of small, mixed moves, the size of the May decline stands out.

The slide in auto insurance inflation is welcome news for consumers, who saw car insurance prices surge sharply through 2023 and into 2024. Monthly increases of 0.9% to 1.2% were common through mid-2024, and prices jumped 2.0% in a single month in January 2025, before the trend began to reverse.

Note: Data for October and November 2025 were not available at the time of publication, and motor vehicle insurance data for December 2025 were also unavailable.

What this means for drivers

Even with May’s sharp drop, drivers are still paying more than they were a few years ago. A single month of falling prices doesn’t undo the steep increases that came before it.

That makes it worth comparing quotes at renewal. Prices can vary widely from one carrier to the next for the same driver, so shopping around is one of the few ways to lower a bill without changing coverage.

It also helps to remember that no index reflects any one person’s premium. Rates depend on factors like age, driving record, the vehicle, coverage limits and location, so two drivers can see very different numbers even when overall prices are moving in the same direction. Shopping around is the best way to find the most affordable coverage for your profile. 

Other insurance segments

Health insurance prices slipped 0.1% in May 2026 — the smallest of six straight monthly declines. After falling steadily since late 2025, the drops have grown shallower each month, a sign the steep slide is flattening out. It’s a clear reversal from mid-2025, when health prices were posting modest monthly gains.

Prices for tenants’ and household insurance rose 0.5% in May, continuing a stretch of choppy, up-and-down months. The segment has swung between small gains and slight dips since late 2025, after a run of steadier increases through the late summer and fall.

The BLS doesn’t track homeowners or life insurance.

Nupur Gambhir

Managing Editor

 

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Nupur Gambhir is the editor-in-chief of Insure.com and a licensed life, health and disability insurance agent in New York with seven years of experience covering insurance. Her expertise has been featured in Bloomberg News, Forbes Advisor, CNET, Fortune, Slate, Real Simple, Lifehacker, The Balance, The Financial Gym and MSN. She holds a BA in Economics from The Ohio State University.