The most recent summary of the Consumer Price Index (CPI) by the U.S. Bureau of Labor Statistics (BLS) reveals a significant increase in car insurance costs over the past year, exceeding overall inflation rates. This rise in car insurance prices is disproportionately affecting low-income drivers in California.
According to the CPI summary released on March 13, auto insurance costs saw an increase of 20.6% over the 12-month period ending in February, as reported by BLS. The report highlighted car insurance among "indexes with notable increases over the last year," alongside medical care (+1.4%) and personal care (+4.2%). The rate of overall inflation for the year ending in February was 3.2%.
The BLS, a part of the Department of Labor according to its website, provides data related to labor economics and analyzes this information for use by government agencies, employers, and the general public.
As previously reported by the Southern California Record, inflation and rising prices are having a negative impact on California’s low-income and nonwhite households. Over half of the state’s low-income and black households have reported financial difficulties covering basic expenses. Excessive litigation has been identified as one factor contributing to these escalating insurance costs, forcing businesses to increase their prices.
A California resident recently expressed frustration on X (formerly known as Twitter) about the state's car insurance industry due to limited options and soaring costs. The post read: "I must obtain new car insurance by 3/18/24 bc @wearefarmers is dumping California," it continued, "I currently pay $35/mo, lowest crap quote is $79." The driver labeled this situation as "highway robbery" for motorists who "can least afford it."