Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Car insurance rates surge again, keeping inflation elevated By: FOX Business May 17, 2024 at 06:00 AM EDT The cost of auto insurance jumped 1.8% in April, bringing the total annual gain to 22.6%. The problem could soon get worse before it begins to improve. Surging auto insurance premiums are stoking inflation and keeping the financial pressure on millions of Americans nationwide.Consumer prices rose 0.3% in April from the previous month, slightly lower than expected, and climbed 3.4% from the same time last year, the Labor Department reported Wednesday.Many of the usual culprits – including rent and groceries – contributed to the monthly increase. But few categories rose as notably as auto insurance.The cost of auto insurance jumped 1.8% in April, bringing the total annual gain to 22.6% – 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.AUTO INSURANCE PREMIUMS ARE SKYROCKETING. WHAT'S TO BLAME?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, previously 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 insurance comparison shopping site. That amounts to roughly 3.4% of the median household income. Even a bare-bones policy required by states climbed to $1,154 per year in 2023.HIGH INFLATION IS COSTING AMERICANS AN EXTRA $1K A MONTHThe national average cost of car insurance hit $2,314 per year for full coverage as of April, according to a separate Bankrate database. That amounts to about $193 a month for full coverage.Several factors have caused the spike in car insurance rates.The price of both new and used cars rose sharply after the COVID-19 pandemic, the result of both supply chain disruptions and unseasonably high demand. As a result, vehicles are more expensive and costlier to replace, which has driven up the price of repairs."Auto insurance costs continued their rapid growth," said Julia Pollak, ZipRecruiter chief economist. "Insurance premiums are belatedly catching up to the large increases in auto repair and replacement costs that took place earlier in the pandemic."On top of that, the country is grappling with a shortage of mechanics, which is driving auto repair costs even higher. One source, the TechForce Foundation, estimates the number of graduates completing post-secondary programs in the automotive sector has plummeted by 20% since 2020. The number of automotive technicians is projected to continue decreasing in the coming years.AUTO INSURANCE RATES CONTINUE TO SKYROCKET WITH NO IMMEDIATE SIGNS OF RELIEFCar insurance companies are also trying to make up for steep losses incurred in 2021, which saw a sharp rise in fatal car accidents."Everyone was using their car insurance a lot then," Martin said. "And then inflation started to kind of continue to grow, and insurance carriers filed for rate increases to, in a way, recoup the money they lost during that time."GET FOX BUSINESS ON THE GO BY CLICKING HEREGiven the astronomical rise in premiums, Martin said buyers should run the numbers on car insurance rates before they purchase a car in order to avoid any surprises.Inflation has created severe financial pressures for most U.S. households, which are forced to pay more for everyday necessities like food and rent. The burden is disproportionately borne by low-income Americans, whose already-stretched paychecks are heavily impacted by price fluctuations. Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Car insurance rates surge again, keeping inflation elevated By: FOX Business May 17, 2024 at 06:00 AM EDT The cost of auto insurance jumped 1.8% in April, bringing the total annual gain to 22.6%. The problem could soon get worse before it begins to improve. Surging auto insurance premiums are stoking inflation and keeping the financial pressure on millions of Americans nationwide.Consumer prices rose 0.3% in April from the previous month, slightly lower than expected, and climbed 3.4% from the same time last year, the Labor Department reported Wednesday.Many of the usual culprits – including rent and groceries – contributed to the monthly increase. But few categories rose as notably as auto insurance.The cost of auto insurance jumped 1.8% in April, bringing the total annual gain to 22.6% – 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.AUTO INSURANCE PREMIUMS ARE SKYROCKETING. WHAT'S TO BLAME?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, previously 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 insurance comparison shopping site. That amounts to roughly 3.4% of the median household income. Even a bare-bones policy required by states climbed to $1,154 per year in 2023.HIGH INFLATION IS COSTING AMERICANS AN EXTRA $1K A MONTHThe national average cost of car insurance hit $2,314 per year for full coverage as of April, according to a separate Bankrate database. That amounts to about $193 a month for full coverage.Several factors have caused the spike in car insurance rates.The price of both new and used cars rose sharply after the COVID-19 pandemic, the result of both supply chain disruptions and unseasonably high demand. As a result, vehicles are more expensive and costlier to replace, which has driven up the price of repairs."Auto insurance costs continued their rapid growth," said Julia Pollak, ZipRecruiter chief economist. "Insurance premiums are belatedly catching up to the large increases in auto repair and replacement costs that took place earlier in the pandemic."On top of that, the country is grappling with a shortage of mechanics, which is driving auto repair costs even higher. One source, the TechForce Foundation, estimates the number of graduates completing post-secondary programs in the automotive sector has plummeted by 20% since 2020. The number of automotive technicians is projected to continue decreasing in the coming years.AUTO INSURANCE RATES CONTINUE TO SKYROCKET WITH NO IMMEDIATE SIGNS OF RELIEFCar insurance companies are also trying to make up for steep losses incurred in 2021, which saw a sharp rise in fatal car accidents."Everyone was using their car insurance a lot then," Martin said. "And then inflation started to kind of continue to grow, and insurance carriers filed for rate increases to, in a way, recoup the money they lost during that time."GET FOX BUSINESS ON THE GO BY CLICKING HEREGiven the astronomical rise in premiums, Martin said buyers should run the numbers on car insurance rates before they purchase a car in order to avoid any surprises.Inflation has created severe financial pressures for most U.S. households, which are forced to pay more for everyday necessities like food and rent. The burden is disproportionately borne by low-income Americans, whose already-stretched paychecks are heavily impacted by price fluctuations.