Insurance bills are finally cooling, unless your clients are Gen Z or live in California

After three years of renewal notices that read like ransom letters, many American households are finally getting a break on what they pay to insure their cars, homes and apartments.

At least, that’s the main finding of a new analysis from the Bank of America Institute, the bank’s in-house think tank. It tracked how much its customers actually paid insurers between September 2025 and August 2026. The median payment rose just 1% from a year earlier. In 2025 the increase was 6%, and in 2024 it was roughly 12%, the steepest run-up in the bank’s dataset.

The average payment rose a bit faster, about 3%. That gap suggests a minority of policyholders are still taking sizable hits that pull the mean upward, while the typical household is seeing little change.

For agents and brokers who spent 2023 and 2024 explaining double-digit increases to angry clients, the numbers line up with what the federal price data has been showing. The motor vehicle insurance component of the Consumer Price Index stood 5.13% below its year-earlier level in August 2026, and about 5.5% below the peak it hit in February. That’s a rare reversal for a line that, at the height of the hard market, was inflating at more than 20% a year.

A tale of two price signals

The Bank of America figures don’t line up neatly with the CPI, and the report’s authors say that’s partly a measurement quirk. Payments track what consumers actually spend. The CPI tracks the price of a fixed policy. Bank of America’s research arm also cautioned that some of the CPI decline may reflect carrier rebates, which consumers don’t necessarily experience as lower bills.

People are also insuring more stuff. New-home and vehicle sales boomed after the pandemic before peaking in mid-2023, which means more insured property even when the price per policy is flat or falling.

Comparison-shopping data adds a further wrinkle. Insurify’s midyear analysis found that average full-coverage auto premiums rose 1% in the first half of 2026, to $2,237, and it projects higher rates in 32 states by year-end. In other words, the softening may already be leveling off. 

The market has clearly shifted toward competition, though. LexisNexis Risk Solutions found that more than a third of US auto rate revisions in early 2026 were decreases, with 35% of filings cutting rates, 39% raising them and 26% holding flat. 

Read next: US auto insurance shopping cools from ‘hot’ to ‘warm’ in Q1 2026: report

Why the pressure eased

Insurers price for the past as much as the future, recovering losses already absorbed while adjusting for new risks. The losses that fueled the hard market have been fading.

Crashes per million miles driven jumped in 2021 and then mostly declined through 2024, according to Department of Transportation data cited in the report. Federal safety figures point the same way. The National Highway Traffic Safety Administration estimated that traffic deaths fell 8.2% in the first half of 2025, even as Americans drove more miles, pushing the fatality rate to its lowest midyear level since 2014. 

Vehicle replacement costs, a heavy driver of auto severity, also peaked in 2022 and have eased since. Repair is the stubborn exception. Over the same twelve months to August, the CPI’s maintenance and repair index climbed 5.24%. That is a gap between falling prices and rising claims costs that carriers will be paying attention to. 

Gen Z is still getting hit

The relief isn’t evenly spread. Gen Z payments rose almost 6% in both 2026 and 2025, after a 7% climb in 2024, making the youngest adults the clear outlier. Millennials and Baby Boomers saw increases of about 2% this year, and Gen X roughly 1%.

The report doesn’t say why. One plausible explanation is that young drivers are still adding vehicles, policies and first apartments, so their insured exposure is growing even if unit prices aren’t. That is our reading, not the bank’s.

Income tells a similar story in reverse. Higher-income households paid about 1.5% more than a year ago. Middle-income households saw little or no change, and lower-income households actually paid slightly less. Bank of America connects this to a “K-shaped” pattern in big-ticket purchases: wealthier households keep buying homes and cars, and so keep adding property to insure.

Read next: Nineteen states set for auto insurance increases – report

Florida flips, California climbs

Geography is the sharpest dividing line. Florida, for years the epicenter of the property insurance crisis, now leads the country in declines, much to the incumbent politicians delight as the midterms approach. Median payments fell about 8% in Orlando, Tampa and Jacksonville and about 7% in Miami. All three of Jacksonville, Miami and Orlando had median payments above the national level in 2023 and have since dropped below it.

The bank credits the state’s legislative overhaul working its way into pricing, and possibly rebates tied to a three-year profit lookback that some carriers apply at renewal. Regulators are seeing the same trend. Florida’s Office of Insurance Regulation recently approved homeowners rate cuts covering more than 62,000 policies, and Commissioner Mike Yaworsky said he expects more aggressive rate cuts heading into 2027. Domestic residential property insurers in the state posted an 83% combined ratio in 2025, compared with 116% in 2020, a sign of how far Florida’s market has moved from recovery to rate competition. 

California is moving the other way. Its big metros, including Los Angeles, San Diego, Sacramento, San Jose and San Francisco, posted the largest payment increases in the country in 2026, following near-double-digit growth in 2025. Bank of America’s research team links this largely to wildfire losses. The scale of those losses helps explain it: California regulators have tallied more than $22.4 billion paid across 42,121 claims from the 2025 Los Angeles wildfires. Seattle, San Jose and Riverside all moved from below the national median payment in 2023 to above it in 2026.  There’s also the issue of previous interference by Californian politicians that is slowly unravelling, but has lead to the departure of a number of major carriers from the market.

Northeastern coastal cities such as Boston and New York also saw sizable increases. Much of the Sun Belt, including Houston, Dallas and Nashville, was flat or down, as the region’s surge in property costs and in-migration through 2024 has cooled or reversed.

Read next: Florida property insurers move from recovery to rate competition

What it means at renewal

For producers, the takeaway is that “rates are coming down” is now true in aggregate and misleading in most individual conversations. A client in Tampa and a client in Sacramento are living in different markets, and a 22-year-old with a new car is in a different market from their parents.

One more caveat matters for homeowners business. Bank of America’s data excludes insurance paid through mortgage escrow or payroll deduction. That means a large share of homeowners premiums never shows up in these figures, and the national picture leans toward auto, renters and mortgage-free homeowners.

Read next: Rates keep falling, but car, casualty and D&O show where the soft market is fraying