The Wall Street Journal reported that many insurers have experienced significant losses over the last few years, which only means that premiums will continue to rise. "Rates need to rise probably five 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. (Related: Used car prices drop 14.2% due to influx of new cars, higher borrowing costs.)
Premiums are even increasing faster than rent and food, which are already badly hit by the continuing inflation. And various reports reflect the skyrocketing auto insurance prices.
Allstate Insurance company has raised car insurance premiums by 40 percent in Georgia, Nationwide Mutual Insurance has also increased insurance rates by 32 percent in California and State Farm has hoisted its rates in New York by 11 percent. Meanwhile, data from the Department of Labor has shown that car insurance rates increased 17 percent in the 12 months ending in May, more than four times the four percent rise in overall inflation.
"Unrestrained rate hikes are hitting the pocketbooks of Americans, and those least able to pay are seeing the worst burden," said Carmen Balber, executive director of consumer group Consumer Watchdog.
On Wednesday, July 12, the Bureau of Labor Statistics (BLS) published June's Consumer Price Index (CPI) data. It shows that car insurance rates soared 16.9 percent year-over-year. Moreover, car insurers lost an average of 12 cents for every dollar of premium written, according to S&P Global.
"It's probably the worst period for auto insurers it's been in 30 years at least," said Neil Alldredge, chief executive of the industry body National Association of Mutual Insurance Companies.
"Even though used car prices are coming off highs and tumbling, the cost of operating a vehicle remains elevated, if that's filling up the gas tank, paying for insurance, and or repair costs, the whole American dream of affording a car and home is becoming more and more unattainable," ZeroHedge's Tyler Durden commented.
Premiums are not likely to go down anytime soon
Insurance Information Institute said in a report that auto insurance premiums are not going to decrease anytime soon. In fact, the likeliest outcome is the rates will have to rise significantly in years to come. Even if general inflation levels off, labor and replacement-parts costs will continue to rise, albeit more slowly.
USA Today's personal finance reporter Medora Lee presented some options to consider lowering the car insurance bill. One is "shopping around" to find good deals. Another one is "bundling," which means compiling your homeowners, car and whatever insurance policies with one insurer for better discounts. She also suggested software that monitors driving style and assigns rates based on safety and mileage metrics.
Aliza Vigderman, content director at AutoInsurance.com, also recommended working from home. "People have shorter commutes or no commutes, so they can pay a small daily rate plus a per mileage rate and save a lot of money," she said. "It also incentivizes safe driving."
Lee, meanwhile, reminded people not to opt for the cheapest insurance, which is the state minimum liability-only policy that only covers people and property outside the car so one would have to pay out of pocket for the medical costs or damage to the car. "At the very least, get full coverage," she pointed out.
Visit Bubble.news for more news related to the ever-increasing prices of just everything in the United States.
Watch the video below that talks about the falling prices of used cars.
This video is from the Zoon Politikon channel on Brighteon.com.
More related stories:
Used car prices DROP 10.6% year-over-year in October – the worst decline in nearly 14 years.
Used car prices are finally starting to drop, but many consumers still can't afford payments.
High car loan rates are driving away prospective buyers.
Inflation pushing many Americans to pay at least $1K monthly on vehicle loans.
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