The auto insurance market attained a value of USD 927.30 Billion in 2025. The market is expected to grow at a CAGR of 7.10% during the forecast period of 2026-2035. By 2035, the market is expected to reach USD 1841.26 Billion.
The rising adoption of electric vehicles is influencing underwriting, claims, and policy pricing. As per International Energy Agency (IEA), over 4 million electric cars were globally sold during the first quarter of 2025. EVs have different risk profiles and repair costs than traditional vehicles, often due to expensive battery systems and specialized repair requirements. Insurers are adapting products to accommodate EV-specific needs, including coverage for charging stations, software issues, and fire risks.
Telematics is reshaping the auto insurance market dynamics by allowing insurers to collect real-time driving data through devices or smartphone apps. Usage-Based Insurance (UBI) relies on this data to calculate premiums based on individual driving behavior, such as speed, braking, mileage, and time of day. This model encourages safer driving, rewards low-risk drivers with lower premiums, and reduces fraudulent claims.
Base Year
Historical Period
Forecast Period
Compound Annual Growth Rate
7.1%
Value in USD Billion
2026-2035
*this image is indicative*
| Global Auto Insurance Market Report Summary | Description | Value |
| Base Year | USD Billion | 2025 |
| Historical Period | USD Billion | 2019-2025 |
| Forecast Period | USD Billion | 2026-2035 |
| Market Size 2025 | USD Billion | 927.30 |
| Market Size 2035 | USD Billion | 1841.26 |
| CAGR 2019-2025 | Percentage | XX% |
| CAGR 2026-2035 | Percentage | 7.10% |
| CAGR 2026-2035 - Market by Region | Asia Pacific | 8.2% |
| CAGR 2026-2035 - Market by Country | India | 9.4% |
| CAGR 2026-2035 - Market by Country | China | 7.8% |
| CAGR 2026-2035 - Market by Coverage | Comprehensive | 8.0% |
| CAGR 2026-2035 - Market by Distribution Channel | Direct Response | 8.1% |
| Market Share by Country 2025 | UK | 3.4% |
Artificial intelligence and machine learning are revolutionizing various aspects of the auto insurance industry, including underwriting, claims processing, fraud detection, and customer engagement. In July 2025, Lemonade expanded to Indiana, offering AI-driven car insurance with real-time pricing, instant claims, and personalized coverage through its digital platform. Chatbots powered by natural language processing provide 24/7 support, while computer vision tools assess vehicle damage from photos.
Autonomous vehicles, especially those with advanced driver-assistance systems (ADAS), are changing liability models in auto insurance. In March 2024, Aviva and Darwin expanded their autonomous vehicle insurance project, enhancing coverage solutions for self-driving cars using real-world data and collaboration. As driving tasks shift from human to machine, the liability may transfer from the driver to manufacturers, software providers, or sensor suppliers. Insurers are re-evaluating traditional underwriting approaches and preparing for new legal frameworks.
The rise of digital platforms and insurtech startups is transforming the auto insurance market expansion with how it is bought, sold, and serviced. Consumers expect seamless, online experiences from getting quotes to filing claims. Direct-to-consumer (DTC) models cut out intermediaries, reduce costs, and offer greater convenience. Insurers are also investing in mobile apps, AI chatbots, and automation to improve customer experience and operational efficiency.
Insurance fraud remains a significant challenge, costing billions annually in false claims. Advances in fraud detection technologies like AI, predictive analytics, and blockchain are helping insurers detect anomalies and flag suspicious behavior. In June 2024, CLARA Analytics launched an AI-powered fraud detection tool to enhance compensation claims management of the workers by identifying suspicious activity and reducing losses. Continuous investment in fraud mitigation is essential to maintaining financial health and competitiveness in the auto insurance industry.
The traditional model of private vehicle ownership is being challenged by Mobility-as-a-Service (MaaS) platforms, including car sharing, ride-hailing, and subscription-based transportation, further increasing the auto insurance industry value. These new models create complex insurance needs, where coverage must adapt to multiple drivers, short-term use, and mixed commercial/personal applications. Insurers are also developing flexible, on-demand, and embedded insurance solutions for these platforms.
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The EMR’s report titled “Auto Insurance Market Report and Forecast 2026-2035” offers a detailed analysis of the market based on the following segments:
Market Breakup by Coverage
Key Insight: Third party liability coverage is the most dominant segment of the market as it is often legally mandatory in many countries. This coverage protects the insured against financial loss arising from injuries or damages caused to others in an accident. In March 2024, Indian IRDAI’s 2024 rules expanded third-party liability insurance, boosting rural access with affordable, simplified policies for underinsured vehicle segments. Its affordability and legal requirement make it the most widely purchased coverage type. Due to this, insurers see a large volume of policies under third party liability compared to other coverages.
Market Breakup by Distribution Channel
Key Insight: Insurance Agents are a leading distribution channel in the auto insurance market. Agents provide personalized advice, helping customers understand complex policy terms and choose suitable coverage. For example, when buying a comprehensive policy, many customers prefer agents to guide them through benefits and exclusions. The face-to-face interaction builds trust and customer loyalty, which is critical in insurance. Agents also assist with claims, making the experience smoother.
Market Breakup by Vehicle Age
Key Insight: New vehicles form the largest segment under vehicle age due to mandatory insurance requirements at the time of purchase. Most dealerships bundle insurance, often comprehensive coverage for the first year. Automakers also partner with insurers to offer seamless insurance options. Given the higher value of new vehicles, owners are more willing to invest in broader coverage. As auto sales increase, especially in emerging markets, the demand for new vehicle insurance continues to rise.
Market Breakup by Application
Key Insight: The personal segment contributes to the auto insurance market value due to the sheer volume of privately owned cars and two-wheelers globally. Individuals are required to insure their vehicles for daily commutes, family travel, or leisure, often opting for both third-party and comprehensive coverage. Rising disposable incomes and increased vehicle ownership in emerging economies have further expanded this segment. As per Data For India, there were 260 million two-wheelers as well as 50 million cars on Indian roads as of September 2024.
Market Breakup by Region
Key Insight: Asia Pacific is the most dominating auto insurance region, driven by massive population, rapid urbanization, and increasing vehicle ownership. Insurance penetration is growing rapidly, especially with regulatory mandates for third-party coverage. The rise of electric vehicles and online insurance platforms has further expanded the market, making Asia Pacific the global leader in policy volume and growth rate. According to the EV Sales Monitor, China exceeded 1 million EV sales in August 2024, adding to the segment growth.
Comprehensive Coverage to Record Preference
Comprehensive coverage is a highly valued segment of the auto insurance market, covering damages to the insured vehicle caused by non-collision events, such as theft, fire, vandalism, or natural disasters. It is popular among owners of newer or high-value cars seeking broader protection. For example, a car owner whose vehicle is damaged in a hailstorm would rely on comprehensive coverage for repairs. With increasing car values and risks, the segment’s market share is steadily growing.
Direct Response & Banks to Boost Auto Insurance Demand
Direct response distribution channels, such as online platforms, call centers, mobile apps, and insurer websites, have seen a sharp rise in popularity, especially among tech-savvy and younger customers. These channels allow consumers to research, compare, and purchase auto insurance policies at their convenience, often without any interaction with agents or brokers. This model appeals particularly for simple products like third-party liability insurance, where decision-making is quick, and price driven.
Banks, through bancassurance, significantly influence the auto insurance market outlook. Insurance products are offered directly at bank branches, through relationship managers, or via digital platforms, such as mobile banking apps and internet portals. In March 2025, PhonePe launched new vehicle insurance for two-wheelers and four-wheelers, offering digital, affordable, and paperless coverage via its mobile app. This model allows seamless bundling of insurance with related products, such as offering auto insurance alongside car loans, creating a one-stop-shop experience.
Used Vehicles to Favor Auto Insurance Uptake
Used vehicle insurance is another significant segment, catering to the growing market of pre-owned cars and motorcycles. As more consumers opt for used vehicles due to affordability, insurers are designing tailored policies with flexible premiums and coverage options. Platforms in India facilitate easy insurance purchases during used car transactions. In July 2025, prominent used car platform CARS24, launched CARE+, India's first all-in-one ownership plan for used cars. The rising demand and digital innovations are driving growth in used vehicle insurance globally.
Surging Auto Insurance Penetration in Commercial Application
The commercial auto insurance market plays a vital role in insuring vehicles used for business purposes, such as taxis, trucks, delivery vans, and fleet services. This segment is growing with the expansion of e-commerce, ride-hailing services, and logistics. However, premiums are usually higher due to increased risk exposure from frequent use and longer travel distances. Insurers also customize policies with specific clauses for commercial risks. Despite its importance, commercial application trails behind personal insurance in total market volume.
Thriving Auto Insurance Industry in North America & Europe
North America is gaining traction, with the United States being one of the world’s most saturated and mature markets. United States consumers often opt for comprehensive coverage due to higher vehicle values and litigious environments. Insurers like State Farm and GEICO dominate with advanced digital claims handling and tailored pricing. Canada also contributes to market strength with mandatory coverage and growing telematics adoption. Despite its maturity, innovation and high policy values keep North America dominant.
Europe is a major player in the global auto insurance market, characterized by strong regulation, high vehicle safety standards, and compulsory motor insurance laws across the European Union. Poland recorded a significant increase in motor insurance payouts, totaling EUR 4.4 billion in 2024. Germany, France, and the United Kingdom also drive demand, particularly in urban centers with high vehicle density. The region has also seen a shift to pay-per-mile insurance to cater to low-usage drivers.
| CAGR 2026-2035 - Market by | Country |
| India | 9.4% |
| China | 7.8% |
| Canada | 6.6% |
| France | 5.6% |
| Italy | 5.0% |
| USA | XX% |
| UK | XX% |
| Germany | XX% |
| Japan | 4.9% |
| Australia | XX% |
| Saudi Arabia | XX% |
| Brazil | XX% |
| Mexico | XX% |
Key players in the auto insurance market are employing several key strategies to remain competitive and meet evolving customer expectations. A major focus is digital transformation, enabling seamless online policy management, claims processing, and customer service. The growing acceptance of telematics and usage-based insurance is boosting the ability of insurers to provide more 'real-time' premiums determined by the behavior of their customers when driving. By supporting improved risk evaluation, new insurance models also encourage increased road safety for their customers.
As insurers and automobile manufacturers, and technology companies move towards developing new products through strategic partnerships, the focus will largely be on connected and autonomous vehicles. Many automobile insurance businesses are entering new markets with a view to market growth while ensuring that they remain compliant with local regulations, address sustainability around managing sustainable practices in policies or incentives for electric vehicles.
Established in 1937 in Ohio, United States, Progressive is famous for introducing usage-based insurance with its Snapshot initiative. It was one of the earliest insurers to provide online management of policies. Progressive has been a leading auto insurer for years, focusing on technology and digital interaction.
State Farm was established in 1922 and is headquartered in Bloomington, United States. As one of the largest automobile insurers in the country and a reputation for personal service and ability to leverage a considerable network of agents, State Farm has utilized digital solutions for claims and customer engagement, while retaining a working ethos centered on the strength of customer service and reliability.
Founded in 1936 and headquartered in Chevy Chase, the United States, GEICO (Government Employees Insurance Company) is renowned for its direct-to-consumer model and humorous marketing campaigns. Now a subsidiary of Berkshire Hathaway, GEICO has leveraged online platforms and mobile apps to simplify insurance buying and claims, becoming one of the top auto insurers.
Allstate was founded in 1931 and is headquartered in Northbrook, the United States. Known for the slogan "You're in good hands," Allstate is a major player in auto insurance. It has innovated with digital tools like Drivewise, a telematics program rewarding safe driving, and offers strong customer service through both digital and agent networks.
*Please note that this is only a partial list; the complete list of key players is available in the full report. Additionally, the list of key players can be customized to better suit your needs.*
Other players in the auto insurance market are Admiral Group plc, among others.
Download your free sample report today to explore the latest auto insurance market trends 2026. Gain valuable insights into growth drivers, competitive dynamics, and emerging opportunities shaping the industry’s future. Stay ahead in the evolving market with Expert Market Research’s reliable data and forecasts. Don’t miss out on this essential resource for strategic planning and investment decisions in the auto insurance sector.
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*While we strive to always give you current and accurate information, the numbers depicted on the website are indicative and may differ from the actual numbers in the main report. At Expert Market Research, we aim to bring you the latest insights and trends in the market. Using our analyses and forecasts, stakeholders can understand the market dynamics, navigate challenges, and capitalize on opportunities to make data-driven strategic decisions.*
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In 2025, the market reached an approximate value of USD 927.30 Billion.
The market is projected to grow at a CAGR of 7.10% between 2026 and 2035.
The market is estimated to witness a healthy growth in the forecast period of 2026-2035 to reach about USD 1841.26 Billion by 2035.
The key strategies driving the market include digital transformation, usage-based insurance, telematics adoption, personalized pricing, AI-driven claims processing, customer-centric services, partnerships with automakers, expansion into emerging markets, regulatory compliance, and sustainability initiatives. These approaches enhance efficiency, reduce risk, and improve customer engagement in a competitive landscape.
The digitisation of financial services to enable customers to purchase and renew auto insurance policies from the comfort of their homes and the growing online availability of vehicle insurance are the key trends fuelling the market growth.
The major regional markets for auto insurance are North America, Latin America, the Asia Pacific, Europe, and the Middle East and Africa.
The significant segments based on coverage of auto insurance considered in the market report are third party liability coverage and comprehensive, among others.
The major distribution channels of auto insurance include insurance agents, direct response, and banks, among others.
New vehicles and used vehicles are the different vehicle ages included in the market report.
Personal and commercial are the significant applications of auto insurance.
The key players in the market report include Progressive Casualty Insurance Company, State Farm Mutual Automobile Insurance Company, GEICO, Allstate Insurance Company, and Admiral Group plc, among others.
Asia Pacific is the most dominating region, driven by massive population, rapid urbanization, and increasing vehicle ownership.
Explore our key highlights of the report and gain a concise overview of key findings, trends, and actionable insights that will empower your strategic decisions.
| REPORT FEATURES | DETAILS |
| Base Year | 2025 |
| Historical Period | 2019-2025 |
| Forecast Period | 2026-2035 |
| Scope of the Report |
Historical and Forecast Trends, Industry Drivers and Constraints, Historical and Forecast Market Analysis by Segment:
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| Breakup by Coverage |
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| Breakup by Distribution Channel |
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| Breakup by Vehicle Age |
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| Breakup by Application |
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| Breakup by Region |
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| Market Dynamics |
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| Competitive Landscape |
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| Companies Covered |
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| Report Price and Purchase Option | Explore our purchase options that are best suited to your resources and industry needs. |
| Delivery Format | Delivered as an attached PDF and Excel through email, with an option of receiving an editable PPT, according to the purchase option. |
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