Mercury Insurance explains how rising repair costs, increasingly complex vehicles and expensive injury claims can affect the cost of auto insurance even when your driving hasn't changed

LOS ANGELES, Sept. 17, 2026 /PRNewswire/ -- You haven't had an accident. You haven't received a ticket. You're driving the same car and your commute hasn't changed. So why can your auto insurance premium still change?

A driver's individual record is an important part of auto insurance pricing, but it isn't the only thing affecting what insurance costs. Mercury Insurance (NYSE/NYSE TX: MCY) says drivers also need to consider a less visible part of the equation: what it costs to repair vehicles, replace totaled cars and cover injuries when accidents happen.

Those costs have changed considerably.

The U.S. Bureau of Labor Statistics reported that motor vehicle maintenance and repair prices were 6.6% higher in July 2026 than a year earlier, while motor vehicle repair alone was up 6.2%. The Insurance Institute for Highway Safety (IIHS) reports that average vehicle repair prices have increased more than 40% since 2020.

"A clean driving record absolutely matters, but it's only one part of the picture," said Justin Yoshizawa, Director of Product Management at Mercury Insurance. "Auto insurance also has to account for what it costs to repair today's vehicles, replace a vehicle that's totaled and cover injuries when crashes occur. Those costs can change even when your own driving habits haven't."

Here's what's happening behind the scenes.

Today's Cars Can Be More Complicated to Repair

A bumper isn't necessarily just a bumper anymore.

Cameras, radar and other sensors used by advanced driver-assistance systems can be located in bumpers, windshields, mirrors and other parts of a vehicle that are commonly damaged in collisions. Repairing the vehicle may require not only replacing damaged parts, but also scanning, diagnosing and recalibrating these systems.

The technology can provide important safety benefits. IIHS research has found that crash-avoidance technologies such as automatic emergency braking, blind-spot detection and other systems can reduce crashes. But when vehicles equipped with these systems are damaged, the technology can add complexity and expense to repairs.

The CCC Intelligent Solutions 2026 Crash Course Report illustrates how common that work is becoming. Calibrations were included in 28.3% of repairable estimates in 2025, up from 21.8% a year earlier, a roughly 30% increase in the share of estimates involving calibration.

Parts and Labor Add to the Bill

Technology isn't the only reason repairs cost more.

Replacement parts, paint, materials and skilled labor all contribute to the final cost of getting a damaged vehicle safely back on the road. BLS data shows that overall motor vehicle maintenance and repair prices increased 6.6% from July 2025 to July 2026, including a 7.3% increase for motor vehicle maintenance and servicing.

That matters to insurance because claim severity, essentially how much it costs to resolve a claim, is one of the basic components underlying insurance losses.

A driver with a spotless record may never generate one of those repair bills. But the overall cost of insuring vehicles is influenced by both how often claims occur and how expensive those claims are when they happen.

Sometimes the Car Isn't the Most Expensive Part of the Claim

It's easy to think of an auto insurance claim as a repair bill. In serious crashes, vehicle damage may be only part of the financial loss.

Auto insurance can also cover bodily injuries, which can involve emergency care, hospitalization, rehabilitation and other medical expenses.

CCC reported that the average amount paid on bodily injury claims increased 10.3% year over year and 32% over four years.

Meanwhile, BLS reported in July that hospital services were 5.2% more expensive than a year earlier, including a 5.8% increase in outpatient hospital services.

"When people think about the cost of an accident, they often picture the damaged vehicles," Yoshizawa said. "But a serious claim can involve much more than sheet metal. Medical care and other costs associated with injuries can quickly become a significant part of the loss."

More Vehicles Are Being Declared Total Losses

There's another shift occurring after crashes: more damaged vehicles are being declared total losses.

CCC reported that total-loss frequency reached a record 23.1% of claims in its 2026 analysis.

A vehicle may be considered a total loss when the cost to repair it reaches a certain threshold relative to its value, subject to applicable state laws and insurer practices. Higher repair complexity can therefore matter in two ways: it can make repairable claims more expensive and can contribute to situations in which repairing a severely damaged vehicle no longer makes economic sense.

So What Can a Driver Control?

Drivers can't control the price of a replacement part, the cost of hospital care or broader collision-repair trends. But that doesn't mean individual choices don't matter.

Safe driving remains important. Depending on the state and insurer, factors such as driving history, the vehicle being insured, mileage, coverage selections, deductibles and eligibility for discounts may influence what an individual pays.

Mercury recommends that drivers:

Protect their driving record. Safe driving can help prevent crashes, injuries and violations while helping drivers maintain a favorable insurance history.
Consider insurance costs before buying a vehicle. Vehicles with similar purchase prices can have different repair costs, theft experience and insurance loss histories.
Review coverage and deductibles periodically. A higher deductible may lower the premium, but it also increases the amount a driver must pay out of pocket after a covered loss.
Ask about available discounts. Eligibility and availability vary by state and insurer, so drivers should periodically review the discounts for which they may qualify.
Keep policy information current. Mileage, drivers, vehicle use and other information should accurately reflect how the vehicle is being used.
Look beyond price alone. Make sure the policy provides the financial protection you need rather than simply selecting the lowest available premium.

"Drivers can't control what a replacement bumper costs or what a hospital charges for medical care, but they can control how they drive and make informed decisions about their vehicle and coverage," Yoshizawa said. "Understanding the difference helps take some of the mystery out of what you're paying for."

Ultimately, an auto insurance premium isn't simply a scorecard for how someone drove last year. It reflects the cost of providing financial protection when crashes, injuries and other covered losses occur.

Understanding what's behind those costs can help drivers ask better questions, evaluate their coverage and make more informed decisions about their auto insurance.

For tips about lowering your auto insurance rates, visit the Mercury Insurance Resource Center.

Sources: U.S. Bureau of Labor Statistics, Consumer Price Index, July 2026; Insurance Institute for Highway Safety/Highway Loss Data Institute; CCC Intelligent Solutions, Crash Course 2026: Complexity Compounds.

Auto insurance rates and rating factors vary by state. The factors insurers may consider, and the weight given to individual factors, are subject to applicable state laws and regulations. Coverages and discounts are subject to eligibility requirements and may not be available in all states.

About Mercury Insurance

Mercury Insurance (NYSE/NYSE TX: MCY) is a multiple-line insurance carrier predominantly offering personal auto, homeowners, renters and commercial insurance through a network of independent agents in Arizona, California, Georgia, Illinois, Nevada, New Jersey, New York, Oklahoma, Texas and Virginia, as well as auto insurance in Florida. Mercury writes other lines of insurance in various states, including commercial, business owners and business auto, landlord, home-sharing, ride-hailing and mechanical protection insurance.

Since 1962, Mercury has provided customers with tremendous value for their insurance dollar by pairing ultra-competitive rates with excellent customer service, through more than 4,200 employees and a network of more than 6,340 independent agents in 11 states. Mercury has earned an "A" rating from A.M. Best, as well as "Best Auto Insurance Company" designations from Forbes and Insure.com. For more information visit www.MercuryInsurance.com or follow the company on LinkedIn, Instagram or Facebook.

Media interested in receiving updates from Mercury can learn more at the Mercury Newsroom.

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SOURCE Mercury Insurance