Cost will rise as technology evolves

The insurance industry has faced escalating claim costs in recent years, which has pressured rates higher for auto, home, pet, and health coverage.

Several insurance experts weigh in on how different sectors of the industry will respond in 2026 as costs continue to rise and technology evolves.

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According to the Bureau of Labor Statistics, auto insurance premiums rose by more than 64% between September 2020 and September 2025, outpacing the general inflation rate of 25% during that time period, according to the BLS CPI Inflation Calculator.

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John Espenschied, owner of Insurance Brokers Group, believes auto insurance rates may actually decline in 2026 — but only for the most qualified drivers. Espenschied cited safer car technology, like lane assist, and high business growth expectations as factors that would push rates lower. Offsetting dynamics include rising repair costs and lingering high inflation.

“Companies will try to attract new business by lowering premiums, but tech repair costs and inflation are here to stay,” Espenschied explained.

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Homeowners insurance rates are expected to rise in 2026 and continue to increase in 2027. Real estate analytics firm Cotality reported that homeowners insurance premiums will climb a total of 16% in 2026 and 2027.

Obtaining homeowners insurance may become more difficult in high-risk areas as insurers stop offering coverage in states prone to natural disasters.

Many experts also expect technology to play a larger role in insurance underwriting in the months and years ahead. Many insurers already utilize AI to help assess risk, detect fraud, and process claims, and industry experts predict that the use of artificial intelligence will only expand.

Learn more: A guide to lowering homeowners insurance costs

In 2026, you may have better access to pet insurance through your workplace benefits package. Employer-sponsored pet insurance plans are becoming popular as more employers recognize that “pet coverage fits naturally into a holistic wellbeing strategy,” said Ron Agatep, vice president at pet insurance provider Healthy Paws.

Agatep expects pet insurance premiums to rise modestly next year. He cited rising veterinary costs, increased availability of advanced treatment options, and higher claims as factors. He recommended enrolling pets early while they’re young and healthy to minimize exclusions and get more value from the coverage.

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Mark Newman, CEO and co-founder of healthcare company Nomi Health, predicts health insurance premiums will get more expensive in 2026, even if medical costs stay flat.

“The real driver is administrative bloat, not care delivery,” Newman said. Rising costs may push more employers to consider direct-to-provider networks — the Nomi model — instead of traditional company-sponsored health plans.

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