The latest Consumer Price Index (CPI) report from the U.S. Bureau of Labor Statistics (BLS) reveals that motor vehicle insurance costs have surged more than the overall inflation rate over the past year. The CPI report, released on Jan. 11, showed that while the overall inflation rate for the 12-month period ending in Dec. 2023 was 3.4%, auto insurance costs soared by 20.3% during the same time frame.

The CPI report also indicated that the motor vehicle insurance index rose by 1.5% in December, following a 1% increase in November. It listed auto insurance among "indexes with notable increases over the last year", alongside shelter (+6.2%), personal care (+5%), and recreation (+2.7%). The cost of new vehicles increased by 1% over the last year, whereas used vehicles saw a decrease of 1.3%.

Bankrate, a consumer financial services company, revealed that its research found motor vehicle insurance rates to be approximately 26% higher in Jan. 2024 than they were in 2023, as per a post on their website. Bankrate predicted that despite a potential decrease in overall inflation, insurance rates will continue to rise throughout 2024. The company attributed this to factors such as "social inflation," "increased claim severity," and chip production shortages contributing to high vehicle insurance costs.

According to Bankrate's report, Kenneth Chavis, a senior wealth advisor at Versant Capital Management, stated that inflation has led to "a sharp rise in the cost of premiums for auto insurance" over recent years. Chavis further noted that inflation has driven up labor and vehicle parts costs.

As stated on its website, BLS is part of the U.S Department of Labor and is responsible for analyzing and publishing data related to U.S economic activities including labor market activity and price changes. The research conducted by BLS is intended to support both private and public decision-making.