Auto Insurance Is Up Way More Than Inflation

With rates surging far ahead of the overall inflation rate, car insurance is eating up a bigger slice of Americans' incomes, and it's not clear if the trend is going to turn around any time soon. According to the latest report from Bankrate.com, the average annual cost of auto insurance has hit $2,014, up $240 year-over-year. That's a rise of almost 15%, compared to the 6.4% inflation rate recorded last month, CBS News reports. More:

• Bankrate.com says the average percent of income spent on auto insurance is now 2.93%, but there are big regional variations. In New York state, an average of around 5% of income is spent on car insurance. At the other end of the scale, the figure for drivers in Maine is just over 1%. States with the lowest rates tend to have the fewest drivers on the road.

• Florida saw the biggest rise in premiums, up almost $480 to an average of $3,200. "There's a lot of residents in Florida and the population is growing," says report author Cate Deventer. "Then we also see a lot of tourists, which then of course add to those busy roadways and that makes it even more likely that an accident is going to happen."
• Experts say car insurance rates are expected to keep rising this year as the cost of parts, labor, and medical care keeps rising, USA Today reports. Claims are also becoming more expensive because more of them are tied up in court, raising expenses significantly.
• CNBC reports that there are numerous ways to reduce premiums, including seeking discounts, improving your credit score, and letting your insurer know if your mileage has markedly reduced.
• In Florida, lawmakers are trying to get premiums down with the bills introduced by Republicans seeking to eliminate no-fault auto insurance and PIP protection, NBC2 reports. A similar move, however, was vetoed by Gov. Ron DeSantis in 2021.

(More auto insurance stories.)