Navigating Changes in the US Auto Insurance Market: A LexisNexis Report
LexisNexis Risk Solutions reports that the US auto insurance market is facing increased complexity, driven by a rise in distracted driving incidents, heightened sensitivity to pricing, and more diverse vehicle fleets. Traffic violations have exceeded pre-pandemic levels, although the number of miles driven has only marginally increased by around 2% since 2022. This suggests that changes in driving behaviors and enforcement practices are influencing violation rates beyond mere exposure.
A significant aspect of this transition is the surge in distracted driving, with related violations increasing by 57% since 2022 across all age groups. Notably, older drivers show the most significant rise in infractions, with violations escalating by 70% for those aged 36–45 and 73% for those aged 66 and older. This trend challenges traditional insurance rating models that often associate lower risks with certain age groups, leading to potential inaccuracies in pricing for insurers who do not account for these behavioral changes.
Consumers are responding to persistent premium hikes by modifying their coverage and engaging more in policy shopping. The percentage of policies with deductibles of $1,000 or more has grown from 23% in 2022 to 33% in 2025, indicating a shift toward greater risk retention by policyholders seeking affordable premiums. Shopping activity reached unprecedented levels in late 2025, with over 47% of policies being shopped at least once in the previous year. The market's dynamism presents both challenges and opportunities for insurers as competition intensifies and the need for refined consumer engagement becomes crucial.
The report highlights that insurance costs have become a crucial part of vehicle purchase decisions, with 56% of consumers indicating that insurance expenses significantly influence their buying choices, second only to monthly payment considerations at 63%. This relationship between vehicle selection and insurance pricing has implications for insurers, needing to adjust rating structures and foster collaborations with manufacturers and lenders.
The vehicle fleet displays increased polarization, with about 15% of insured vehicles over 20 years old, while newer models from model year 2020 onwards represent 30% of insured units. These newer models, often equipped with advanced driver-assistance systems, can reduce collision rates but lead to increased repair complexity and costs. In contrast, older vehicles typically exhibit different patterns in repair and total-loss scenarios.
The report also notes a significant shift in claims composition, as bodily injury claims now account for over 26% of overall claims costs, up from less than 20% in 2022. The frequency and severity of these claims are increasing, suggesting a need for insurers to reassess capital allocation between physical damage and liability lines and to adapt their reinsurance strategies accordingly.
Jeff Batiste, senior vice president and general manager for US auto and home insurance at LexisNexis Risk Solutions, emphasized that evolving driving behaviors, intensifying consumer price sensitivity, and increasing claims influenced by bodily injury severity are key areas for brokers and agents to navigate. Effective communication of coverage adjustments and highlighting the benefits of insurers leveraging data analytics to manage these emerging trends will be crucial.
The 2026 LexisNexis report suggests that insurers integrating detailed behavioral and vehicle data with strategic pricing approaches can progress from merely adjusting rates to achieving sustainable, risk-adjusted growth in the next phase of the US auto insurance cycle.