Inflation rates for motor vehicle insurance rose by 1.2% in July, as reported by the most recent Consumer Price Index (CPI) summary from the U.S. Bureau of Labor Statistics, which outpaced the national average inflation rate of 0.2% in July.
Although the national inflation rate saw a decrease of 0.2% in the previous month of June, motor vehicle insurance costs still increased that month by 0.9%.
Over the last year, the all items index has increased 2.9% nationwide, according to the report. Motor vehicle insurance costs have increased 18.6% across the country in the same time frame.
Other indexes that increased in the month of July include shelter, household furnishings and operations, education, recreation, and personal care.
With car insurance costs rising throughout the country, New Jersey residents are now spending an average of $2,555 on their auto insurance premiums, which is more than the national average, northjersey.com reported. Garden State residents with poor credit, who have had lapses in coverage, or who insure teen drivers pay even more.
Sean Kevelighan, CEO of the Insurance Information Institute (III), said in a July 16 statement that “legal system abuse,” which includes practices such as third-party litigation funding (TPLF), is contributing to rising insurance costs.
“Another unfortunate factor proliferating the rising costs of insurance is legal system abuse, which basically entails billboard attorneys swaying Americans toward litigation as a first step, rather than one of last resort," Kevelighan said. "This unfortunate phenomenon is a problem that needs more attention and fixing."
