In March 2024, the Consumer Price Index (CPI-U) for the South Region increased by 0.4%, with a yearly gain of 3.8%, driven by rises in gasoline and shelter prices, according to the U.S. Bureau of Labor Statistics (BLS).
Auto insurance rates were a contributor to national inflationary pressures, rising 22.2% since March of last year, according to the BLS. Auto insurance rates rose an average of 2.6% nationally in March. The national CIP-U rose 0.4% in March 2024, and the national average was a 3.5% increase in the last year.
Economists Neil Irwin and Courtenay Brown said the cost of car insurance coverage is “rising at unprecedented rates,” disrupting the “U.S. economy's disinflationary path.” Irwin and Brown shared their statement in an April 15 Axios newsletter.
According to a report by the National Association of Mutual Insurance Companies (NAMIC), abuse of the legal system, including practices like third-party litigation funding, is driving up insurance costs for all policyholders by increasing the number of lawsuits. This rise in litigation forces businesses to hike their prices, subsequently passing these costs onto consumers.