– Auto Insurers Hit By Worst Crisis In “30 Years,” Sends Premiums Skyrocketing:
On the inflation front, consumers have a reason to celebrate, as prices for used cars saw a significant drop in June. However, there’s a flip side to this as auto insurance rates soar, driven mainly by higher repair costs, larger medical bills, and soaring litigation fees.
The Wall Street Journal found Allstate has jacked up car insurance premiums by 40% in Georgia, Nationwide Mutual Insurance has increased insurance rates by 32% in California, and State Farm has bumped rates in New York by 11%. The reason is that many of these insurers have experienced significant losses over the last several years, an indication premiums will continue to rise well into 2024.
“Rates need to rise probably 5 to 10 percent in each of the next couple of years, because the loss trends have gone up so much,” said Dale Porfilio, chief insurance officer at industry group Insurance Information Institute.
On Wednesday, the Bureau of Labor Statistics published June’s latest Consumer Price Index data. While US annual inflation cooled to 3% last month, a subcomponent of the index, car insurance rates, soared 16.9% year-over-year, taking out pandemic highs.
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