Insurance Rates & Market
Insurance Knowledge Base
Why Insurance Rates Change
Insurance premiums can change even when you haven’t filed a claim or made significant changes to your coverage. Understanding what influences insurance rates can help make those changes feel a little less mysterious and help you make more informed decisions about your protection.
There’s More Behind Your Premium Than Claims
Insurance premiums are based largely on the expected cost of future claims, not simply what an insurance company paid last year. That means your rates can be affected by broader changes happening throughout the insurance market. Factors can include:
- Higher repair, rebuilding, medical, rental-car, towing, and legal costs
- More frequent or severe weather losses
- Changes to a property’s value, location, use, construction, or occupancy
- Increasingly expensive vehicle technology and repairs
- Lawsuit frequency and larger jury awards
- Reinsurance costs
- Updated catastrophe models, inspections, imagery, and loss data
- Changes in an insurer’s appetite, capacity, expenses, and claim experience
What’s Happening in the Insurance Market?
2025 Industry Results
The U.S. property-and-casualty industry reported a 92.9% combined ratio in 2025, improving from 96.9% in 2024 and 101.7% in 2023.
Rising Home Replacement Costs
Home replacement costs increased approximately 29% cumulatively from 2021 through 2025, while severe convective storms caused more than $61 billion in U.S. damage during 2025.
Commercial Pricing
Average surveyed commercial premium increases moderated to 1.9% in Q4 2025, although individual coverage lines varied significantly. Commercial auto increased 6.6%, while commercial property decreased 0.7%.
Important: These are national market averages and industry results. They do not predict what will happen with an individual policy or renewal.
Your Policy Isn’t the National Average
National insurance results combine many different states, insurance companies, customers, and types of coverage. Your renewal is based on forward-looking costs along with factors specific to you, such as your property, vehicles, location, coverage limits, claims history, and insurance carrier.
Changes also take time to work through regulatory filings and renewal cycles, so improving industry profitability does not necessarily translate into an immediate premium decrease.
Focus on What You Can Control
You can’t control the entire insurance market, but there are steps you can take to better manage your risks and make sure your coverage continues to fit your needs.
- Review your insurance annually and after major life or business changes
- Make sure property, vehicle, payroll, sales, and other information is accurate
- Ask whether different deductibles make sense for your situation
- Ask about available protective-device or risk-mitigation credits
- Maintain your property, vehicles, and safety systems
- Keep continuous coverage and make payments on time
- Talk with your insurance advisor before major purchases or changes
IMPORTANT: This material is general educational information and is not intended as legal, tax, safety, or coverage advice. Insurance policies contain conditions, limitations, and exclusions, and coverage is determined by the actual policy and the facts of a loss. Statistics are national unless otherwise stated and do not predict an individual premium. Consult a licensed insurance professional and other qualified advisors for guidance specific to your circumstances.