Why car insurance rates are skyrocketing | The Daily Courier

TheStreet’s J.D. Durkin brings the latest business headlines from the floor of the New York Stock Exchange as markets open for trading Thursday, March 14.

Full Video Transcript Below:

J.D. DURKIN: I’m J.D. Durkin – reporting from the New York Stock Exchange. Here’s what we’re watching on TheStreet today.

Investors are reacting to a key inflation report – producer prices rose 0.6 percent in February, double the 0.3 percent expected, representing an increase of 1.6 percent since 2023. This report is an unwelcome development to traders betting on interest rate cuts in the near future.

In other news – not only has it gotten more expensive to buy a car, but also the cost of insuring that car has gone up. According to the freshly released C-P-I data, car insurance rates skyrocketed 21 percent from February 2022 to February 2023. That’s the most rates have increased in almost 50 years. In fact, car insurance rates alone were responsible for a half percentage point of February’s overall 3.2 percent inflation rate.

So what’s behind the rise in rates? A couple of things. First off – repairing a car has gotten more expensive, up 6.7 percent. That’s thanks to more expensive auto parts and a labor shortage for mechanics.

Another factor is the amount of accidents that are happening. Traffic deaths increased by 7,000 in 2022 – the last year of full data. That led to a significant rise in claims, which then led to significant losses for insurance companies.

How much you pay also depends on where you live. According to S&P and CNN, from January 2023 to February 2024, Nevada drivers saw the biggest bump in rates with a 38 percent increase. However, those in North Carolina saw only a 5.5 percent jump.

That’ll do it for your daily briefing. From the New York Stock Exchange, I’m J.D. Durkin with TheStreet.