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Auto insurance premiums are climbing fast in 2025, and drivers are feeling it. With inflation, supply chain disruptions, and increasing repair costs, many Americans are paying more than ever just to stay insured.
To understand how consumers are reacting, we surveyed over 1,000 drivers. The results reveal growing frustration with pricing models, major behavioral shifts in response to rising costs, and a clear generational divide in how drivers manage the burden.
This report breaks down who’s paying more, what sacrifices drivers are making to stay insured, and how younger generations are leaning into tech and trade-offs to keep premiums in check.
Many drivers have felt the sting of rising auto insurance premiums in 2025. This part of the study looks at which groups are paying more and who’s feeling the financial pressure most.
Baby boomers were the most likely to report car insurance premium increases, with 72% saying their rates went up this year. Roughly two-thirds of both Gen Z and millennial drivers (65%) also experienced rate hikes. Among those who saw an increase, over one in four (27%) said their annual premiums rose by $100–$200.
Overall, 23% of drivers have considered dropping coverage due to cost, with younger drivers especially feeling the financial squeeze. Gen Z drivers were more than twice as likely as baby boomers to consider canceling their auto insurance over cost concerns (38% vs. 19%). This suggests that many want to find more affordable policies, not that they’d go without coverage.
Many consumers also question whether these rising costs are justified. Nearly three in four drivers (71%) believed insurers were using inflation as an excuse to raise rates more than necessary, as did 75% of Gen Z.
As insurance premiums climb, drivers are making tough decisions to manage expenses or sticking with what they know if they can’t find better options. Here’s how different generations are responding to rising costs and what trade-offs they’re willing to make.
More than half of drivers (53%) stuck with their current car insurance, even as prices went up. One in five (20%) shopped around but couldn’t find a better deal, while nearly one in 10 (9%) Americans switched providers three or more times over the past two years. Baby boomers were the most likely to increase their deductible to save money (17%), compared to 9% of millennials and Gen Z, and just 8% of Gen X.
Many are also adjusting how they drive to cut back. Millennials were the most likely to reduce driving due to rising insurance costs (16%), followed by baby boomers (15%), Gen Z (14%), and Gen X (13%). These close numbers show that financial pressure spans all generations.
Among Gen Z drivers, 48% have delayed or skipped car maintenance due to insurance and vehicle costs, and 11% have even considered selling their car. Another 63% said they would be willing to accept a higher deductible in exchange for lower premiums, which was the highest rate of any age group.
Despite efforts to cut costs, many drivers feel the system itself isn’t working in their favor. Over 4 in 5 (85%) believed auto insurance pricing models were unfair.
Faced with rising premiums, many younger drivers are open to alternatives that could make insurance more affordable. Learn how Gen Z is responding with flexibility and a strong interest in tech-driven solutions.
More than 2 in 5 (41%) Gen Z drivers were considering switching to a usage-based insurance (UBI) program, which tracks driving habits in exchange for potential savings. Nearly 1 in 8 (13%) already use one. In exchange for lower premiums, 35% of Gen Z would be willing to give up certain driving freedoms, like avoiding late-night trips or accepting speed monitoring.
Gen Z is also open to letting technology lead the way. Nearly half (46%) said they would install AI-powered safety features in their vehicles if it meant reducing their insurance costs.
As premiums rise, drivers are adjusting their budgets and rethinking how, when, and even if they stay insured. Many believe current pricing models are unfair, and some are willing to sacrifice freedom or adopt new technologies in hopes of saving. Gen Z stands out as the most flexible and tech-forward, while baby boomers appear more loyal to their insurers but no less impacted.
The data paints a clear picture: Rising costs are forcing drivers to adapt in ways that could permanently reshape consumer expectations and the insurance industry itself.
We surveyed 1,006 American drivers to explore how rising auto insurance premiums are affecting consumers in 2025. The generational breakdown was Gen Z (14%), millennials (50%), Gen X (26%), and baby boomers (10%). Survey data was collected in March 2025.
Guardian Service makes shopping for auto insurance easier, more affordable, and less stressful. With a customer-first approach, we help drivers protect what matters most while keeping the process simple and transparent.
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