Auto insurance rates rose 2.6% in March and are up 22% from a year ago. Premium costs have been marching steadily higher since 2022, even as inflation at the consumer level steadily cooled from its 9.1% peak in the middle of that year. Consumers have had some relief as the rate of cost increases for food and energy, two key components of most budgets, has eased greatly.
But the persistent rise in rates over the last two years has been far more sweeping. New vehicle prices starting spiking during the pandemic, mainly because of a worldwide shortage of computer chips amid production cuts and supply chain bottlenecks. Dealers spent much of 2021 with few or no cars in stock.
Higher overall auto prices and auto repair costs prompted insurers to start raising premiums as overall car values jumped. Price increases for insurance rates, like many other increases from food to clothing, have been sticky and are less likely to drop at the same rate as broader inflation, if at all.
Progressive’s profit jumped 50% and its revenue surged nearly 18% to $62.1 billion in 2023. Wall Street expects its profit to skyrocket nearly 80% in 2024 on a 14% jump in revenue. The process of obtaining auto insurance can be confusing and overwhelming, considering the differing mix of requirements in each state, extra options and the confusing industry and legal jargon used by insurers. The first step for many should be gaining a better
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