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.
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.
The 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.