Auto Insurance Continues To Drive Inflation, Lawsuit Abuse Reform Would Help Bring Prices Down

With today’s Consumer Price Index (CPI) report, we got further confirmation that motor vehicle insurance costs continue to be one of the biggest drivers of inflation, with an 11.8 percent increase over the last year.According to the Bureau of Labor Statistics:

The motor vehicle insurance index rose 2.0 percent in January. … Indexes with notable increases over the last year include motor vehicle insurance (+11.8 percent), medical care (+2.6 percent), education (+3.8 percent), and recreation (+1.6 percent).

The Wall Street Journal noted the significance of high auto insurance costs:

Insuring a car represents about $3 out of the $100 basket of goods measured in the consumer-price index. … Vehicle-insurance inflation has slowed after surging in recent years, but costs were still up more than 11% in December.

Fortune also highlighted the high costs for car owners:

If you own a vehicle, your costs got much heavier over the last year. Auto insurance costs have risen nearly 12% from where they were a year ago.

The Washington Post’s Heather Long:

Note: Eggs and auto insurance had an outsized impact in January.

Eggs soared a whopping 13.8% in January and are up 53% from a year ago.

Motor vehicle insurance was up 2.2% in January and is up 11.8% in the past year. pic.twitter.com/wZEAPQqIbN
— Heather Long (@byHeatherLong) February 12, 2025

To lower rising auto insurance rates and protect consumers, ending lawsuit abuse should be a top priority for lawmakers across the country. As Florida has successfully demonstrated, lawsuit abuse reform has successfully brought insurance prices down in the state.