Automobile insurance remains the leading segment in the U.S. property and casualty insurance market, a position it has held for over a decade. As of 2024, automobile insurance accounted for 41.6% of the market share, peaking at 43.4% in 2018. Following auto insurance, property insurance held 35.7%, while liability insurance made up 19.5%. Smaller segments like crop and agricultural insurance and specialty lines represented only 1.8% and 1.7%, respectively.
As of March 3, 2025, the private passenger auto insurance sector reported direct premiums written of $344 billion, which is approximately 35% of all written premiums in the industry. This dominance is attributed to several factors, including legal requirements for coverage, the high number of vehicles owned by households, and the frequency of claims and renewals. Auto insurance is also one of the most visible types of insurance, consistently marketed to consumers.
However, the market faces potential challenges ahead. Recent tariff announcements from President Donald Trump have raised concerns among industry experts. These tariffs, which include a 25% tax on imported cars and parts, could lead to increased repair and replacement costs. Insurers may pass these costs onto consumers through higher premiums. Rate comparison site Insurify predicts that these changes could push annual auto insurance costs for a single vehicle up to $2,750, up from around $2,300.
Despite these looming challenges, automobile insurance continues to show resilience. It not only has the highest premiums earned but also the highest market share and direct losses paid. While personal injury protection, a no-fault coverage option, only makes up 4% of the market, its commercial counterpart is even smaller at 0.3%. This limited presence reflects the narrow application of no-fault laws, which are only active in a few states.
As businesses brace for the impact of the new tariffs, they are concerned about the potential for increased costs related to claims. Insurers will need to maintain competitive pricing and efficient claims processes to stay relevant in this evolving market. The landscape is also shifting due to emerging risks, such as advanced driver-assistance systems and autonomous vehicles, which could alter how insurance is structured and sold.
Brokers and insurers alike will need to adapt to these changes. There may be growth opportunities in commercial lines, especially as businesses expand their fleets and seek tailored coverage options. On the other hand, declining demand in no-fault jurisdictions may require a reevaluation of service offerings and client education.
As the market continues to evolve, stakeholders will need to keep a close eye on trends and shifts in consumer behavior. For a deeper dive into the current state of the property and casualty insurance market, resources are available through the Property and Casualty Line of Business Performance and Market Trends dashboard.