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September 2025
The US auto insurance market is booming, poised for a revenue surge into the hundreds of millions from 2025 to 2034, driving a revolution in sustainable transportation. The U.S. auto insurance market is expanding rapidly for several reasons, each of which stems from more people owning a vehicle that requires a form of protection against automobile accidents, theft, and damage. Higher levels of automobile theft and accidents have increased individual awareness of the need for protection. Moreover, government-provided or suggested car insurance regulations have encouraged owners to obtain coverage. In addition, the trend towards usage-based auto insurance (where costs are based on an individual's driving habits) has surfaced as an alternative to traditional auto insurance.
The U.S. auto insurance market refers to the industry providing vehicle coverage, offering protection against financial loss in the event of an accident, theft, or damage to the vehicle. In the U.S., the auto insurance industry is widespread, as it is an endemic service used by individual drivers, companies around the world with business fleets, taxi and transportation, and delivery services. Insurance is purchased by owners of personal vehicles, commercial fleets, and livery taxi drivers who drive for apps, such as Uber and Lyft. Auto insurance can realize growth potential from the leap in car ownership, laws around auto insurance (or government recommendations), and increased providers of e-commerce delivery services.
| Metric | Details |
| Growth Drivers | Increasing car ownership, government-mandated insurance, rise in accidents & thefts, e-commerce fleet expansion, usage-based insurance, digital platforms. |
| Market Segmentation | By Coverage Type, By Policy Type, By Distribution Channel, By Vehicle Type, By Payment Mode and By Region |
| Top Key Players | State Farm, Geico, Progressive, Allstate, USAA, Liberty Mutual, Farmers, Nationwide, American Family, Travelers, MetLife, AIG, Berkshire Hathaway. |
The trends in the US auto insurance market are partnerships, and new agencies launches by well-established automakers.
The liability insurance segment dominated and captured around 38% of the total U.S. auto insurance market since liability insurance is required in nearly every state. This insurance protects drivers and other people financially in the case that they injure someone or damage someone's property in an accident. As liability insurance is the lowest coverage that drivers are required to have, it will always be in higher demand. Moreover, due to its low cost, it might be the only insurance that the majority of car holders may have.
The comprehensive insurance segment is expected to be the fastest-growing segment in the market as more drivers desire to be protected from more exposures than accidents. Comprehensive insurance covers damage or theft due to fire, vandalism, natural disasters, and animals, which are risks that seem to be becoming more prevalent throughout the U.S. Some of this increase is likely due to the rise in value among vehicles (luxury vehicles and electric vehicles). More vehicle owners want a higher coverage policy at the expense of their car purchase.
The personal auto insurance segment dominated and captured almost 75% of the total U.S. auto insurance market, due to more vehicles being owned for personal use, as opposed to commercial. Families and individuals comprise the biggest share of drivers in America. These policies are straightforward to purchase; they are sometimes required by lenders for auto loans, and these policies are almost always cheaper than commercial auto. Moreover, personal transportation is an immense part of day-to-day life in America, and this segment continues to lead very strongly.
The commercial auto insurance segment is expected to witness the fastest growth rate in the forecasted period because businesses depend more and more on vehicles for deliveries, logistics, and services. In a world getting more comfortable with e-commerce, business, the fleets of vans and trucks will need more coverage. Further, ride-hailing services and food delivery services like Uber, Lyft, and DoorDash will also require commercial policies to mitigate risk to the driver while delivering service. In addition, companies that employ gig workers for last-mile deliveries and/or that utilize commercial vehicles for experience-focused mobility or delivery will drive this segment forward at increasing speed.
The brokers/agents segment dominated and captured around 45% of the total U.S. auto insurance market, as many customers seek guidance in purchasing insurance. The role of an agent is to help customers search for policies that align with their budget and desires and then help customers understand if the quote satisfies legally mandated coverage. Notably, vetting the policy that meets the customers' needs while finding a great value further supports the preference of agents and brokers. Personal trustworthiness of the broker or agent is highly dependent on a human interacting with them, especially older customers. Because agents and brokers often have a long history with their customers and with the insurance companies, many agents and brokers are considered by the customer to be the most trusted and preferred method of transaction.
The online platforms segment is expected to witness the fastest growth rate in the forecasted period, as it has become the most convenient channel that offers speed and transparency. Customers can shop for pricing, read reviews, and ultimately make a purchase without the hassle of meeting or even speaking to an agent. Digital tools (Apps and websites) created the opportunity for on-demand quotes and self-service policy management. Younger generations are driving the growth of online shopping for insurance, as their digital assistant can now assist them to shop, coordinate, and compare their interests for reasonable coverage.
The passenger vehicles segment dominated and captured almost 70% of the total U.S. auto insurance market, as these vehicles are the most commonly owned. Households use personal passenger cars as their primary means of commutation, errands, and travel, all of which provide stable consistency in demand from households that need insurance coverage. Passenger vehicles are also the primary means of transport in most cities and towns with limited public transportation options. Since personal passenger vehicles represent the largest number of vehicles used in the U.S., demand for passenger vehicle insurance coverage leads to industry growth in overall insurance coverage demand.
The electric vehicles (EV) segment is expected to witness the fastest growth rate in the forecasted period due to increasing adoption rates largely driven by government subsidies, growing environmental awareness, and improved charging capacity and availability. EVs are also often more expensive to repair because of the technology embedded in the vehicle and the battery, which prompts vehicle owners to seek insurance through stronger insurance coverage. Auto insurance providers have also been offering new insurance products, including policies specific to credentials and coverage for EVs, which, in addition to increasing EV adoption rates, have made it easier for drivers to maintain insurance coverage.
The annual payment segment dominated and captured 50% of the total U.S. auto insurance market, as it is more favorable for the customer than creating monthly payment plans. Payment in full is frequently rewarded with a discount by insurance companies. Moreover, many consumers prefer avoiding the hassle of remembering to pay monthly and potentially facing issues with late payments. Insurers also appreciate the method as it produces a more immediate cash flow; thus, both parties favor a yearly payment schedule. For those consumers who can afford a sizeable payment, insuring on an annual basis is the easiest and most cost-effective option.
The monthly payment segment is expected to be the fastest-growing segment in the market. A monthly payment schedule provides a customer with the option to pay less on an insurance premium when they may not be able to afford to pay in full in one lump sum. Many consumers prefer the option to budget their finances month to month; paying a larger amount in January and having to reorganize finances in June for another payment may be inconvenient to the consumer. Inflation and the increased cost of living have made payments on a more monthly basis continue to look appealing.
Recent technological developments in the market for solid-state batteries have included the transition from liquid electrolytes to solid electrolytes, which have led to improved safety and energy density. In addition, companies have advanced towards lithium-metal chemistries, lithium-sulfur chemistries, and alternatives to lithium altogether to improve driving range and reduce weight for electric vehicles. The market has also seen the emergence of new production processes that are aimed at scale-up and cost benefits, such as roll-to-roll processing, which enabled new miniaturization opportunities for wearables and medical devices.
The South region dominated the U.S. auto insurance market, capturing a total market share of 35%. It dominates the market as it possesses a large population, high car ownership, and long travel distances. Moreover, many people relied on personal vehicle ownership, escalating the need for insurance, and faced the consequences of frequent weather-driven disturbances, such as hurricanes and floods, leading to the need for comprehensive coverage. In addition, strict insurance regulatory policies supported steady sales of policies as the regional economy was robust. Opportunities existed to expand digital platforms and usage-based insurance, as well as offer niche products focused on electric and hybrid vehicles, which began appearing slowly over time in southern states.
The West region is expected to be the fastest-growing region in the U.S. auto insurance market due to increasing interest in electric vehicles and environmental compliance policies. For instance, California spearheaded the electric vehicle movement, creating demand for insurance products centered on these vehicles. Moreover, congestion in urban areas, a growing interest in telematics, and a younger tech-savvy demography allowed for accelerated growth. Opportunities in the West existed for digital-first insurance platforms, pay-per-mile or usage policies, and partnerships with automakers. The region's focus on innovation and sustainability has provided insurers with the opportunity to pilot new products with a fast-changing and curious customer segment that demands new products.
The Northeast region experienced significant growth in the U.S. auto insurance market due to its dense urban populations and a high prevalence of car accidents. More stringent governing regulations surrounding automobile insurance at the state level, along with higher-than-average costs of living, drove consumers toward more robust and comprehensive automobile coverage. The increase in ride-hailing services and commuting further increased the need for automobile insurance. Some opportunities existed with the need for online platforms, presenting affordable monthly payments, and even products tailored for the drivers in cities who may not strictly need a comprehensive policy.
The Midwest saw resiliency in the growth of the auto insurance market due to its large rural geography, where vehicles were the primary form of transport. The amount of severe, unexpected weather events, such as hailstorms and accidents involving snow, accounted for an increased demand for coverage across this geographic region. The strength of the agricultural economy and logistics industries also increased the need for commercial vehicle insurance. Overall, the demand from personal and commercial-based vehicle populations balanced out supported the Midwest region's growth in the U.S. auto insurance market.
| August 2025 | Announcement |
| Tony Nicolosi, President & CEO, Volvo Car Financial Services. | By launching Volvo Car Insurance Services, we are extending Volvo Cars’ commitment to safety and simplicity well beyond the vehicle. This expanded offering combines a seamless digital experience with flexible, personalized coverage options, supported by licensed insurance agents who provide expert, transparent guidance, creating a new standard for what customers should expect from automotive insurance. |
| July 2025 | Announcement |
| Petar Vucurevic, president of American Honda Insurance Solutions, LLC and senior vice president at American Honda Finance Corporation. | Honda Insurance Solutions offers customers access to coverage through a brand they know and trust. Insurance is a key touchpoint in the vehicle ownership journey, and we aim to deliver a superior experience tailored to the unique needs of each customer, while promoting safer driving and increased peace of mind on the road. |
| April 2025 | Announcement |
| Alex Timm, Founder and CEO at Root, Inc. | We are excited to partner with Hyundai Capital America, a company that shares our passion for innovation and customer-first solutions. This partnership allows us to build something unique for HCA drivers, while further diversifying and expanding our insurance offerings across multiple distribution channels. |
| Date | Announcement |
| Jason Shapiro, Senior Vice President of Business Development at Root. | The independent agent channel presents a unique opportunity to reach more drivers. First Connect’s technological prowess and productive independent agent community make them a natural partner for building a seamless and secure interface and further diversifying our distribution strategy. |
The US auto insurance market is highly competitive. Some of the prominent players in the market are Allstate Insurance, State Farm Insurance, Geico, Progressive, USAA, Farmers Insurance, Nationwide, Liberty Mutual, American Family Insurance, Travelers, Hartford, MetLife, Esurance, AIG, Auto-Owners Insurance, Berkshire Hathaway Insurance, The Hanover Insurance Group, Safeco Insurance, The Cincinnati Insurance Companies, and Amica Mutual Insurance. A large number of players in the U.S. auto insurance market devoted attention to the digitalization of their processes and platforms, exploring the launch of usage-based insurance products and collaboration with automakers. Several firms also invested in telematics and data analytics to enhance pricing for policies based on risk and improve claims processing for automotive insurance risks. Many companies have also formed in-house agencies or embedded insurance as alternative means to connect to customers directly.
| Company | About |
| Allstate Insurance | Allstate Insurance was founded in 1931. Allstate Insurance offers liability, comprehensive, and collision auto insurance across the U.S. and utilizes digital tools and apps to simplify the policy purchasing and claims process for drivers. |
| State Farm Insurance | State Farm Insurance began in 1922 and offers auto policies for both personal and commercial vehicles. While State Farm has historically built its insurance reputation through its agent network, it emphasizes customer service, roadside assistance, and personalized policy options for drivers throughout the U.S. |
| Geico | Geico was founded in 1936. Geico is a household name known for providing auto insurance at affordable rates, with a heavy presence online. Geico has innovated the auto insurance business model to focus heavily on a digital-first experience, instant quotes, and wide options for coverage among cost-conscious drivers across the U.S. |
| Progressive | Progressive began doing business in 1937 and is known as an innovator in auto insurance with telematics and usage-based insurance. Progressive offers liability, comprehensive and collision policies, but is known as a tech-based insurance company focused on apps and comparison tools to attract and promote its business to tech-savvy insurance purchasers. |
| USAA | USAA was founded in 1922. USAA offers auto insurance specifically to military members, veterans and their families. Known for its cheaper rates, excellent customer service and coverage formulated to fit the unique needs of military-connected drivers across the U.S. market. |
| Farmers Insurance | Farmers Insurance was founded in 1928. Farmers Insurance provides auto insurance policies directly to people and businesses. Farmers Insurance markets itself as flexible coverage, great agent service, and loads of digital offerings serving millions of drivers in urban and rural localized areas of the U.S. market. |
| Nationwide | Nationwide was founded in 1926. Nationwide provides auto insurance policies covering liability, collision and comprehensive. Nationwide is known for providing great coverage, options that are tailored and great value-added benefits such as accident forgiveness and roadside assistance to vehicle owners in the U.S. market. |
| Liberty Mutual | Liberty Mutual was founded in 1912. Liberty Mutual is a global insurer, but is a key auto insurance provider in the U.S. The company provides flexible policies, partnerships with automotive manufacturers, and a focus on digital platforms serving both consumers and commercial vehicle owners. |
| American Family Insurance | American Family Insurance was established in 1927. The company provides auto insurance focused on personalized service and affordability. The company serves families through agents and online tools and offers coverage for personal and commercial vehicles in the U.S. |
| Travelers | Travelers was established in 1864. The company offers auto insurance policies that focus on robust protection, digital claims handling, and flexible coverage. The company is known for its distinguished financial strength and reliability in serving personal and business vehicle owners in the U.S. |
| Hartford | Hartford was established in 1810. The company is known for auto insurance policies tailored in particular for older drivers through alliances, such as AARP, etc. Hartford focuses on customer service, safety features, and tailored coverage to support responsible driving in the U.S. |
| MetLife | MetLife was established in 1868. It offered auto insurance solutions before selling its property and casualty business to Farmers. MetLife offered auto insurance policies with good value features like flexible payment terms, bundled insurance with property insurance, and dependable claims service for customers in the U.S. |
| Esurance | Esurance was founded in 1999. The company quickly grew in popularity as one of the first auto insurance providers to offer a fully online service. They routinely offered fast quotes all electronically, used paperless processes for everything, and managed claims through digital processes. This company catered to the needs of tech-savvy drivers, and before being fully absorbed by Allstate, it offered its online insurance products. |
| AIG | AIG was founded in 1919. AIG focused on high-net-worth consumers and offered specialty coverage for high-end vehicles. They promoted global expertise and offered tailored insurance coverage for drivers who had unique or expensive needs. |
| Auto-Owners Insurance | Auto-Owners Insurance was founded in 1916. This insurance company offers automobile insurance through independent agents located across the U.S. Auto-Owners Insurance has a reputation for offering strong customer service and financial strength. The company offers straightforward auto coverage and covers personal vehicle coverage, commercial fleets, and specialty automobiles. |
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By Coverage Type
By Policy Type
By Distribution Channel
By Vehicle Type
By Payment Mode
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September 2025
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