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Changes Coming to Home and Auto Insurance in 2026

And How They Will Affect Drivers and Homeowners in Certain States

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By Susan Meyer
Updated January 14, 2026
Reviewed By Beth Swanson
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Susan Meyer

Senior Editorial Manager

Susan is a licensed insurance agent and has worked as a writer and editor for over 10 years across a number of industries. She has worked at The Zebr…

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  • Licensed Insurance Agent — Property and Casualty
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Beth Swanson

Insurance Analyst

Beth joined The Zebra in 2022 as an Associate Content Strategist. A licensed insurance agent, she specializes in creating clear, accessible content t…

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  • Licensed Insurance Agent — Property and Casualty
  • Associate in Insurance (AINS)
  • Professional Risk Consultant (PRC)
  • Associate in Insurance Services (AIS)
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  1. Insurance at the State Level
  2. State Insurance Changes Proposed or Effective in 2026

What Will 2026 Herald for Insurance?

A new year is just around the corner, which can get many people thinking about change and what 2026 may bring.

And when it comes to insurance prices, laws and requirements, change is the name of the game. From economic conditions driving up repair prices to weather events leading to big losses, and of course personal rating factors, you can always expect to see some fluctuations in your rates, and many of them are unpredictable and out of your control.

However, there are some changes we can know with certainty. As state laws and regulations change, we can expect to see changes in insurance prices and requirements in those states.

In this article, we’ll look at some of the changes that are coming in the first half of 2026 in certain states and how they may affect you.

Insurance at the State Level

In 2025, insurance prices rose in some states and fell in others. Here’s a look at where insurance prices changed the most.

Percent Decrease and Increase in Insurance Rates from 2024 to 2025

Source: The Zebra

One of the reasons insurance prices change based on where you live is because insurance is a state-regulated industry.

That means states have the power to control what insurance companies can charge and how much they can increase rates. States vary significantly in how much they regulate commercial lines insurance (home and auto insurance). The regulatory process varies from state to state but are guided by three principles:

  • Rates must be adequate for insurance companies to remain solvent.
  • Rates must not be excessive
  • Rates must not be unfairly discriminatory.[1]

Let's look at some of the laws upcoming in 2026 and how they will impact consumers in those states. 

State Insurance Changes Proposed or Effective in 2026

Here are a few of the changes in insurance law that are already in place and expected to impact people’s home and auto insurance in the coming year.

Colorado: More Transparency for Homeowners in Fire-Prone Areas

In February of 2025, Colorado lawmakers introduced a bill that affects homeowners insurance in the state. It was passed into law in May of 2025 and will go into effect in July of 2026 for policies issued or renewed thereafter.

Essentially the law requires insurers who use a wildfire risk model, a catastrophe model or another scoring model for underwriting homes to follow specific requirements for sharing that information with policyholders.[2]

What this means for Colorado homeowners:

Insurers must provide you with your wildfire risk score and the reasons for the score. You should be informed of which mitigation efforts (for example, a fire-resistant roof) will get you a discount, and you have the right to appeal or improve your score through mitigation efforts.[3]

North Carolina: Higher Homeowners Rates, But Not as High as Proposed

The North Carolina NCRB settlement of 2025 was an agreement reached between the North Carolina Rate Bureau (NCRB) and the North Carolina Insurance Commissioner that will result in an average 15% homeowners increase over two years.

The first half of the increase began in June of 2025 and the second will occur in June of 2026. While the increase isn’t insignificant, it was much less than the proposed 42.2% increase the NCRB initially sought.[4]

What this means for North Carolina homeowners:

You may see increases in your home insurance, but know that this settlement was a big win for North Carolina homeowners, capping significant increases for home insurance. The expected savings of the difference for North Carolina homeowners is reportedly $777 million over two years.

New Jersey: Liability Minimums Are Going Up

Meanwhile, to the east, New Jersey enacted a new auto insurance policy the final phase of which will go into effect on January 1, 2026.

Since 2022, New Jersey has been changing its minimum coverage requirements.[5] Beginning in January of 2026, all new or renewed policies must meet the standard of 35/70/25. That is:

  • $35,000 per person coverage
  • $70,000 per accident coverage
  • $25,000 property damage coverage

What this means for New Jersey drivers:

If you were covered under the previous minimum coverage, your coverage will no longer be sufficient. Your insurance company is required to notify the named insured that policy limits have increased at the time of renewal. You will now need to purchase additional coverage to comply with New Jersey law.

California: New Laws Around Wildfire Threats

Wildfires have become increasingly prevalent – and expensive – in recent years. The wildfires in Los Angeles last January were the single most expensive event of the year and the most expensive U.S. wildfire ever, at a cost of $107 billion.[6]

As such, California lawmakers have proposed a couple of laws that, if enacted, would go into effect in 2026.

  • California SB 1060: If a property insurer uses risk models for underwriting, the models would be required to account for wildfire risk reduction and fire mitigation methods.[7]
  • Insurance Regulation Initiative #25-0020: This ballot initiative, with a target effective date in November of 2026, would require coverage for wildfire-hardened homes and strengthen non-renewal rules, making it harder for homeowners to be dropped from coverage.[8]

What this would mean for California homeowners:

Both of these laws are intended to incentivize homeowners to take fire mitigation methods and better protect their homes from fires. The first will offer discounts if they do so, and the second will make it harder for their insurance company to drop them at renewal.

Louisiana: Renewals and Changes in Comparative Fault Laws

Lousisana is seeing changes in both home and auto insurance this year. Under a new state law as of January 1, 2026, Louisiana insurers will have to prominently display the previous prior premium when showing the new premium offered at renewal. The laws also states that rate filing standards shall not be "excessive, inadequate or unfairly discriminatory."[9]

Lousiana is also tightening notice for home and auto insurance cancellations by doubling the notice period insurers must give when cancelling or non-renewing a policy to 60 days. This will begin July 1, 2026.[10] 

And in auto insurance, a new law makes it so that a first lapse in insurance coverage cannot be itself a trgger for a rate increase. And if you have 5 years of continuous coverage, the lapse is considered your first. This too was effective as of January 1, 2026.[11]

What this means for Louisianians

Many of these laws offer greater protections for Louisiana homeowners and drivers. Having more notice about a policy nonrenewal can give more time to find a new option. And, if a driver is unable to find insurance in that time, a one-time lapse in coverage will be less of a penalty. Meanwhile, HB 148 is a significant insurance reform law that aims for greater transparecy for consumers, but some are concerned about its impact on insurance market stability and affordability. 

Connecticut: Insurers required to disclose flood damage not covered

A law passed in July of 2025, states that insurers of homeowners and renters policies in Connecticut must include clear language stating that losses caused by flood damage are not covered under the policy and that seperate flood coverage must be purchased. Insurers must file the required notice with the department on or before January 31, 2026, for new or renewal policies effective on or after July 1, 2026.[12]

What this means for Connecticut homeowners

Flooding is on the rise in Connecticut, as it is in many coastal states as a result of global climate change.[13] While it's not new that standard home and renters insurance policies don't cover flood damage, this law is a push for greater transparency so Connecticut homeowners and renters aren't blindsided by what their policy does and not cover. 

Texas: Insurers Must Provide Reasons for Non Renewals

Another one effective as of January 1, 2026, a new Texas law now requires insurers to provide written reasons when declining, cancelling or nonrenewing a home or auto insurance policy. It also mandates quarterly reporting to the Texas Departmetn of Insurance of these reasons for nonrenwal or cancellation, organized by ZIP code. The Texas Department of Insurance will then provide public disclosure of this data.[14]

What this means for Texans

The purpose of this law is increase transparency and provide Texas homeowners and drivers with clearer information about insurer decisions by making this information publically available. It also is intended to help regulators understand trends in where policies are being cancelling and renewed to hopefully improve insurance accessibility. 

Wrapping Up

Even if you don't live in one of the states highlighted here, it's always good to be abreast of changes happening where you are. 

You can always search your state department of insurance to find out what's new or upcoming in laws or ballot initiatives that may affect you down the line.

Sources

  1. Insurance Regulation. [Insurance Information Institute]

  2. Risk Model Use in Property Insurance Policies. [Colorado Assembly]

  3. Redrawing the Risk Map: How HB25-1182 Could Reshape Insurance for Colorado Ranches. [Confluence Land Company]

  4. Commissioner Causey negotiates settlement on Rate Bureau’s homeowners’ insurance request. [NC Department of Insurance]

  5. Auto insurance coverage limits. [The State of New Jersey]

  6. LA Fires Push Insurers’ 2025 Disaster Losses to $107 Billion. [Bloomberg]

  7. SB 1060: Property insurance underwriting: risk models. [CalMatters]

  8. California Insurance Regulation Initiative (2026). [Ballotpedia]

  9. New Law Orders Louisiana Insurers to Show Prior Policy Premiums. [Insurance Journal]

  10. Louisiana tightens notice rules for home, auto insurance cancelations. [Insurance Business Magazine]

  11. RS 22:1284.1 [Louisiana State Legislature]

  12. Flood Insurance Disclosure Requirements Under Public Act No. 25-33. [Insurance Department of Connecticut]

  13. In CT, flooding is on the rise. But the state has new tools to face it. [Connecticut Mirror]

  14. H.B. No 2067. [Texas Capitol]