The data: Auto insurance will remain a stable market, according to our recent forecast. US auto insurance policyholders will total 214.6 million by 2028, a modest 3.5% increase from 2025.

Digging into the data: While policyholders will grow roughly 1% annually through 2028, penetration will only just then return to its pre-pandemic levels. Auto insurance is growing, but carriers are largely fighting to reclaim lost ground.

Zoom out: The cost of owning a car is near historic highs. The average monthly payment payment for a new car in Q3 2025 was $748 per month, and the total monthly cost of ownership of a new car in 2025 averaged $965. Auto insurance by one measure ran nearly $141 per month. And consumers are shopping around: In Q4 2025, 47.1% of policies-in-force had been shopped at least once in the past 12 months, up 1.9 points from Q4 2024 and 5.9 points from Q4 2023.

Implications for insurers: As rising costs and increased shopping activity pressure margins and retention, insurers need more precise ways to price risk. This should include telematics to collect driver data and modern AI models to assess risk profiles. Insurers including Progressive, State Farm, Allstate, Nationwide, and Liberty Mutual already use telematics, following early movers like Root and Lemonade.

Insurers’ barriers to collecting more and deeper data or analyzing it effectively are rooted in technical limitations and strategic gaps. Consumers are happy to share their data: According to our December 2025 report, Insurance Trends to Watch in 2026, more consumers are open to sharing driving data in return for lower auto premiums. As external pressures raise costs and compress margins, insurers that fail to modernize how they collect and use data risk falling behind.