North Carolina drivers will see their auto insurance rates decrease by 0.1% in 2025, making it the only state to experience a drop in rates this year, according to Lending Tree’s State of Auto Insurance 2025 report. But the report also says rates could spike in 2026. Here’s why.

KEY TAKEAWAYS Motor vehicle insurance increased by more than 2% in January and is more than double what it cost before the COVID-19 pandemic.Most American drivers say these prices are unaffordable, and many are going without insurance or reducing their coverage.

Costlier cars or auto parts can increase claims costs, which take time to filter through to car-insurance rates.