LOS ANGELES – The latest stats show that while inflation ticked up just a smidge in January from the month before, on an annual basis, the inflation rate has dropped to 2.8%.
Even so, many consumers are asking, “Why doesn’t it feel like things are improving?”
One reason for that is persistently high food prices.
Another is your car insurance.
The cost to insure vehicles rose another 1.4% in January. It’s up nearly 21% over the last year — the largest such speed bump since 1976.
The insurance industry blames the increases on the rising cost of repairs. Fixing a bumper, for example, was once a relatively easy task. Nowadays, car bumpers can carry an array of high-tech sensors.
Faced with higher risk, the industry, not unreasonably, says it has no choice but to raise rates.
But some analysts say insurers, like food companies, are using economic uncertainty as cover to pad their pockets.
The average cost to insure a vehicle is now about $2,500 a year. In 2022, that cost was closer to $1,800.
A key problem, of course, is that drivers are a captive market. You need to be insured to hit the road, so you’re forced to pay whatever insurers demand.
It’s estimated that the cost of car insurance could rise by another 7% this year.
State officials cracked down on unwarranted coverage costs during the pandemic, when most cars remained in driveways.
Perhaps it’s time they took another look at the industry.