Car insurance prices have continued the trend of increasing at a faster rate than the national inflation increases.
That's according to the latest Consumer Price Index (CPI) report from the U.S. Bureau of Labor Statistics.
Motor vehicle insurance costs increased by 0.6 percent throughout the month of August, compared to the national average inflation increase of 0.2 percent.
Similarly, car insurance costs have risen 16.5 percent over the last 12 months, while the average inflation rate increased by 2.5 percent over the same time period.
The index for shelter rose 0.5 percent in August, also above the average inflation rate. The food index increased 0.1 percent, while airline fares rose 3.9 percent during the month.
Plaintiff’s attorneys are engaging in tactics that result in a larger number of lawsuits and higher litigation costs and payouts, according to the Insurance Information Institute (III). As a result of these tactics, car insurance costs are rising, exacerbating economic challenges for consumers. “There are real costs behind what we all know and see plaguing our roads with promises of settlement dollars, as billboard attorneys are racking up fees, and consumers are found to be getting less and less. The price of insurance is the effect, not the cause of risk, and there must be more work done to curb legal system abuse, as auto insurers – both personal and commercial – are seeing significant increases in claims costs when attorneys enter into the picture,” III CEO Sean Kevelighan said in a statement.
Rustin Silverstein, president and founder of X Ante, said attorney advertisements contribute to a larger volume of lawsuits, according to the Travelers Institute. This large volume of litigation leads to higher insurance costs for consumers and higher costs for goods and services. Every American household pays a “tort tax” of $3,600 every year due to the costs of excessive litigation.
