Auto insurance premiums are skyrocketing. What's to blame?
Nevada ranked the second highest auto insurance rates in the country, according to Insurify.
Surging auto insurance premiums are fanning the flames of high inflation and keeping the financial pressure on millions of U.S. households nationwide.
Consumer prices rose 0.4% in March from the previous month and climbed 3.5% from the same time last year, the Labor Department reported Wednesday.
Both of those figures came in higher than the 0.3% monthly increase and 3.2% headline gain forecast by LSEG economists.
Many of the usual culprits – including rent and groceries – contributed to the surprisingly hot reading. But few categories jumped as substantially as auto insurance.
The cost of auto insurance rose 2.6% in March, bringing the total annual gain to 22.2% – the fastest yearly rate on record. When compared with the beginning of 2021, before the inflation crisis began, motor vehicle insurance is more than 50% more expensive.
HIGH INFLATION IS COSTING AMERICANS AN EXTRA $1K A MONTH
Traffic on I-95 in Baltimore, Maryland, on April 4, 2024. (Nathan Howard/Bloomberg via Getty Images / Getty Images)
Experts say the problem could soon get worse before it begins to improve.
«With car insurance, it's something that's been building up for a while now,» Shannon Martin, a Bankrate analyst, told FOX Business. «Car insurance tends to be very reactionary, so in the past few years, the industry has experienced a lot of losses during a time when inflation has caused the cost of vehicle parts, different products and repair costs, to increase.»
In 2023, the average U.S. rate for full auto insurance surged to $2,019, a 24% increase from $1,633 in 2022 and a nearly 29% jump from $1,567 the previous year, according to Insurify, an
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