Why car insurance costs are skyrocketing, leading to higher inflation [Video]

DETROIT – Skyrocketing auto insurance costs helped contribute to inflation accelerating at a faster-than-expected pace in March and are adding to the ever more expensive costs for U.S. vehicle owners.

On a monthly basis, car insurance prices as part of the consumer price index rose by an unadjusted 2.7%, while the year-over-year increased by 22.2%, according to data released Wednesday. The index is a key inflation gauge and a broad measure of the cost of goods and services across the economy.

Auto insurance costs have been on the rise for some time, growing every month as part of the index since December 2021. Since then, costs have increased by 45.8%, according to U.S. Bureau of Labor Statistics. However, auto insurance remains a small portion of the CPI, with a 2.85% weighting.

The uptick comes on top of historically high prices for new and used vehiclessince the coronavirus pandemic. It’s also become increasingly more expensive to repair vehicles …