2026 insurance outlook: Costs will rise as technology evolves

Core Insights - The insurance industry is experiencing rising claim costs, leading to increased premiums across various sectors, including auto, home, pet, and health insurance [1] Auto Insurance - Auto insurance premiums have increased by over 64% from September 2020 to September 2025, significantly surpassing the general inflation rate of 25% during the same period [2] - There is a possibility of a decline in auto insurance rates in 2026 for the most qualified drivers, driven by advancements in safer car technology and high business growth expectations, although rising repair costs and persistent inflation may counteract this trend [3] Homeowners Insurance - Homeowners insurance rates are projected to rise by a total of 16% in 2026 and 2027, with challenges in obtaining coverage in high-risk areas due to insurers withdrawing from states prone to natural disasters [4] Technology in Insurance - The role of technology, particularly artificial intelligence, is expected to expand in insurance underwriting, aiding in risk assessment, fraud detection, and claims processing [5] Pet Insurance - Access to pet insurance through workplace benefits is anticipated to improve, with premiums expected to rise modestly due to increasing veterinary costs and advanced treatment options [6] - Early enrollment of pets is recommended to minimize exclusions and maximize coverage value [6] Health Insurance - Health insurance premiums are expected to increase in 2026, driven by administrative costs rather than care delivery, which may lead employers to explore direct-to-provider networks as an alternative to traditional health plans [7]