The cost of car insurance is skyrocketing for Americans just as everything else is also going up, severely burdening Americans and fanning the flames of inflation.
Car insurance premiums have gone up far more than consumer prices in March, according to Fox Business Network. Federal data shows that consumer prices rose 0.4 percent, but car insurance premiums rose 2.6 percent during the same month.
That brings the annual rise to 22.2 percent, which is the fastest yearly rate hike ever. Even worse, the new rates are 50 percent more expensive than rates in 2021.
Unfortunately, it is going to get worse.
"With car insurance, it's something that's been building up for a while now," said Shannon Martin, a Bankrate analyst. "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."
Premium costs have soared to roughly 3.4 percent of America's median household income. Fox Business Network added, "In 2023, the average U.S. rate for full auto insurance surged to $2,019, a 24 percent increase from $1,633 in 2022 and a nearly 29 percent jump from $1,567 the previous year."
The hikes put average insurance rates at about $193 a month for full coverage.
The costs of insurance has become a serious stumbling block for families struggling to pay mortgages and rent and feed their loved ones.
Perhaps unsurprisingly, these hikes in premiums were approved by the Biden administration even as the costs of the pandemic were hitting America.
ZipRecruiter senior economist Julia Pollak told Fox Business, "Car insurance costs are surging as insurers finally get regulator approval for premium increases necessitated by the large increase in auto repair and replacement costs that has taken place since the pandemic."
There are several pressures driving the hike in rates.
First of all, the cost of parts and repairs has jumped, which has put pressure on the repairs that insurance has to cover for car owners.
Fox Business added that another reason repair costs are rising is that there are too few trained mechanics in the work place to do all the labor necessary. In fact, the number of mechanics newly graduated from training centers is down 20 percent since 2020. This is causing a spike in costs.
Costs are also rising because of the ongoing supply chain issues, giving us a third reason for the rise in insurance prices. These delays are causing repair shops to raise prices over availability of the parts they need, as well.
Finally, there is the spike in the number of traffic fatalities, which reached a 16-year high in 2021, according to the National Highway Traffic Safety Administration.
In 2021, the NHTSA found 42,915 fatalities, a 10.5 percent increase from the 38,824 fatalities in 2020. Naturally, the costs related to these fatal accidents has driven up costs for insurance providers.
These costs are a serious burden on Americans slammed with Bidenflation, and they are getting far worse, adding to the pain every family is feeling. It's just another example of why we need a leadership change in Washington, D.C., in November.
