The U.S. Bureau of Labor Statistics’s (BLS) Consumer Price Index (CPI) report shows an increase of 20.3% in the motor vehicle insurance index over the last twelve months, with the all items index increasing 3.3% during that time.
Although the index for motor vehicle insurance declined during the month of May, the all items index remained unchanged.
Notable increases in the all items less food and energy index over the last twelve months include motor vehicle insurance, the shelter index with an increase of 5.4%, medical care costs which were up 3.1%, and personal care, which increased by 2.9% over the last twelve months.
The CPI report for the New York-Newark-Jersey City area shows an overall increase of 3.4% over the past twelve months. Motor vehicle insurance rates increased 6.9% during that same time period.
Testimony from the American Property Casualty Insurance Association (APCIA) for a House Financial Services Committee hearing in November said that “legal system abuse” is one of the root causes of rising insurance costs for consumers, according to a copy of the testimony. APCIA pointed to the increasing size of jury verdicts, the involvement of third-party financiers in lawsuits, and a proliferation of attorney advertisements as contributors to this legal system abuse, which forces businesses to raise their prices to account for a heightened cost of risk. The organization called for legislators to enact tort reform measures to address these abuses.
