Auto Physical Damage Coverage Hit a 20.7% Return in 2024, Its Best in 10 Years
While auto liability insurers posted an underwriting loss in 2024, physical damage coverage delivered its best return in ten years, and the gap between those two lines is reshaping how carriers price your policy right now.
Published: Sep 16, 2026
While auto liability insurers posted an underwriting loss in 2024, physical damage coverage delivered its best return in ten years, and the gap between those two lines is reshaping how carriers price your policy right now.
The National Association of Insurance Commissioners (NAIC) released its Report on Profitability by Line By State in 2024, and the numbers tell a striking story. As reported by Repairer Driven News, auto physical damage coverage profitability reached a 10-year peak return on net worth of 20.7% in 2024, nearly 50% above the previous decade high of 13.8% set in 2020. Meanwhile, auto liability posted a 1.9% underwriting loss, creating one of the sharpest intra-industry contrasts in recent memory. The Save Max Quote Index, drawn from 3.3 million+ real quote requests, reflects this split: comprehensive and collision premiums are responding to carrier profitability signals faster than liability rates, which remain under pressure.
Auto Physical Damage Coverage Just Posted Its Best Decade in Returns, While Liability Bled Red
Carriers earned a 20.7% return on net worth against $149.3 billion in net premiums earned from private passenger auto physical damage coverage in 2024, according to Repairer Driven News. To put that in perspective, the 10-year average return since 2015 sits at just 6.3%.
That 14-point gap between the long-run average and the 2024 result is not a rounding error. It signals a structural shift in how physical damage coverage is performing for carriers, and it matters for your wallet.
Auto liability, by contrast, delivered a 1.9% underwriting loss in 2024. That divergence matters because most full-coverage policies bundle both. Carriers flush with physical damage profits may offset liability losses internally, or they may choose to compete aggressively on comprehensive and collision pricing to win market share.
Either way, you are sitting at an unusual inflection point as a consumer shopping for full coverage.
How Carriers Swung From a 2022 Crash to a 2024 Peak
The decade from 2015 to 2024 was anything but smooth for auto physical damage coverage profitability. The 10-year average return on net worth of 6.3% masks years of serious volatility.
The low point came in 2022, when the return on net worth fell to -7.8%, the only negative year in the entire decade. That same year, underwriting losses reached 13.6%, as supply chain disruptions, parts shortages, and surging used-vehicle prices hammered carriers trying to settle physical damage claims.
Then came the reversal.
By 2024, carriers had repriced policies aggressively, repair cost inflation had moderated relative to premium levels, and the return on net worth climbed from its 2022 nadir all the way to 20.7%. That is a swing of nearly 28.5 percentage points in just two years, one of the fastest recoveries in the line's recorded history under NAIC tracking.
The previous decade high before 2024 was 13.8% in 2020, a year when pandemic-era driving reductions slashed claims frequency dramatically. The 2024 result eclipsed even that anomalous year by nearly 50%.
Underwriting Profits: A Wilder Ride Than Return on Net Worth
Here is something the headline return number does not fully capture: underwriting profit is even more volatile than return on net worth, according to the NAIC data.
The 10-year average underwriting profit for physical damage coverage since 2015 is just 1.5%. The 2024 figure of 12.4% is more than eight times that average. The previous underwriting profit high was 10.8% in 2020, itself an outlier year driven by pandemic-reduced claims.
"Underwriting profit has been more turbulent from year to year than return on net worth," according to the NAIC data cited by Repairer Driven News.
The 2022 underwriting loss of 13.6% stands as the decade's worst. Moving from a 13.6% underwriting loss to a 12.4% underwriting profit in just two years represents a 26-point swing, extraordinary by any measure in personal lines insurance.
What drives that volatility? Underwriting profit is highly sensitive to claims frequency and severity in any single year. Return on net worth incorporates investment income and broader capital performance, which smooths the swings. When claims costs dropped relative to repriced premiums in 2023 and 2024, underwriting profit rocketed upward faster than the capital-level metric.
For consumers, this distinction matters because underwriting profit is the number that most directly triggers competitive repricing behavior among carriers.
State-by-State Winners: Wyoming, South Dakota, and Utah Lead Profitability
Not every state delivered equal returns. The NAIC report breaks down profitability by state, and the geographic spread is wide. Carriers operating in rural, low-density markets with lower claims frequency posted the strongest numbers.
| Wyoming | 29.1% | 19.4% |
| South Dakota | 28.4% | 18.7% |
| Utah | 26.9% | Not specified in source |
| North Dakota | Not specified in source | 16.1% |
Wyoming drivers saw carriers post the highest return on net worth in the country at 29.1%, along with the highest underwriting profit at 19.4%. South Dakota drivers came in second at 28.4% return on net worth and 18.7% underwriting profit. Utah ranked third in return on net worth at 26.9%.
For North Dakota drivers, the state ranked third in underwriting profit at 16.1%, reflecting similarly favorable claims environments across the northern plains.
The pattern is clear: lower population density, lower theft rates, and fewer severe weather events relative to vehicle value tend to produce healthier carrier margins. That profitability creates the conditions for more aggressive competitive pricing in those markets.
Carriers Are Cashing In, So Why Are Some Cutting Premiums?
Record profitability and premium reductions seem contradictory. They are not.
When carriers swing from multi-year losses to decade-high returns, two forces take over: competitive pressure and regulatory expectation. Both push rates down.
"Allstate announced it would reduce premiums for 7.8 million auto and homeowners insurance customers after more than doubling its net income in 2025," according to Repairer Driven News.
That reduction was not charity. Allstate is signaling to regulators and consumers that its pricing is sustainable, and it is competing to retain customers who might otherwise shop around in a softening market.
State Farm moved even more boldly. The company ended 2025 with a net income of $12.9 billion, doubling its profit, and began issuing payments to qualifying auto customers as part of a one-time $5 billion cash back dividend. A $5 billion dividend is a powerful retention and goodwill tool, and it is only possible when physical damage profitability is running at decade highs.
The SMQI shows that consumer shopping behavior tends to spike after high-profile announcements like State Farm's dividend. When one major carrier makes a public gesture toward customers, competing carriers face pressure to match or beat it on price.
What this means for you
Shop your comprehensive and collision coverage now, carrier competition is at a multi-year high, and the profitability data suggests physical damage premiums have room to move downward. Request quotes in your specific state, because geographic variation is enormous: a driver in Wyoming or South Dakota is in a very different market than a driver in a high-density state. If you currently carry only liability coverage, compare full-coverage quotes today, since physical damage underwriting profits mean carriers are actively competing for comprehensive and collision business. Ask your current insurer directly whether you qualify for any dividend or premium reduction program similar to what State Farm and Allstate have rolled out.
What to Watch in 2025 and Beyond
The 2024 numbers are exceptional. The question is whether they last.
Several factors could reverse the trend. Auto liability's 1.9% underwriting loss in 2024 is a persistent drag on overall carrier profitability. Carriers cannot indefinitely subsidize liability losses with physical damage gains without eventually repricing both lines upward.
Macroeconomic conditions also matter. If vehicle values rise sharply again, as they did in 2021 and 2022, claim settlement costs climb and underwriting margins compress quickly. The 2022 crash to -7.8% return on net worth happened fast.
On the positive side, if claims frequency remains moderate and carriers continue disciplined underwriting, the decade-average return of 6.3% could recalibrate upward. The 2020 and 2024 peaks, while partly driven by anomalous conditions, also reflect genuine repricing discipline that took hold after years of losses.
Watch for state-level regulatory activity as well. When carriers in a state post returns near 29%, regulators sometimes intervene to limit future rate increases or mandate rebates. Wyoming and Utah drivers in particular should monitor any regulatory announcements from their state insurance commissioners in 2025.
FAQ
What does auto physical damage coverage profitability mean for my premium?
When carriers earn strong profits on physical damage coverage, comprehensive and collision, they face competitive pressure to lower premiums to retain and attract customers. The 2024 record return of 20.7% has already prompted moves like Allstate's premium reductions for 7.8 million customers. Higher industry profitability generally creates a better environment for shopping around and finding lower rates.
Why did auto insurance become so unprofitable in 2022?
The NAIC data shows 2022 was the only year since 2015 in which physical damage coverage posted a negative return on net worth, at -7.8%. That year also saw a 13.6% underwriting loss. Surging vehicle repair costs, parts shortages, and elevated used-car values all drove claims costs sharply above premium levels that had been set before those conditions emerged.
Which states have the most profitable auto physical damage markets?
According to the NAIC's 2024 report, Wyoming leads with a 29.1% return on net worth and 19.4% underwriting profit. South Dakota follows at 28.4% return on net worth and 18.7% underwriting profit. Utah ranks third with a 26.9% return on net worth. North Dakota posted the third-highest underwriting profit at 16.1%.
What is the State Farm $5 billion dividend and do I qualify?
State Farm ended 2025 with a net income of $12.9 billion and announced a one-time $5 billion cash back dividend for qualifying auto customers. Eligibility details are set by State Farm directly. The program reflects the insurer's record profitability and is designed to retain existing policyholders while signaling financial strength to regulators and consumers.
Should I drop comprehensive and collision coverage since carriers are so profitable?
Carrier profitability does not reduce the financial risk to you from an uninsured loss. If your vehicle has meaningful value, dropping physical damage coverage shifts that risk entirely onto you. A more useful move is to shop competing quotes, since carriers are profitable and competing for business, you may find significantly lower premiums for the same coverage rather than needing to eliminate it.
About Brooke Grissom
Brooke Grissom is an Independent Insurance Analyst at Save Max Auto, licensed in Property & Casualty and Health insurance. She covers data-driven market trends, cross-state premium comparisons, and carrier financial analysis. Read more from Brooke Grissom →
Edited by Cassidy Richey.
Methodology
This article is grounded in the source linked above. Save Max Auto data points referenced here are drawn from the Save Max Quote Index (SMQI), a proprietary instrument reflecting 3,364,317 real consumer quote requests submitted to savemaxauto.com. State and carrier rankings reflect the lifetime dataset; year-over-year shifts reflect a rolling 12-month window. The index is refreshed monthly. External authority figures referenced (NAIC, NHTSA, state regulators) reflect the most recent public data releases available at time of writing.
Sources
- Primary source: Repairer Driven News, "NAIC: Auto physical damage coverage sees highest return in decade in 2024"