We explore the dramatic 20% increase in car insurance premiums across the US last year.
Recent data from the Bureau of Labor Statistics highlights a significant rise in consumer car insurance costs in 2023 compared to 2022. What could be driving this sharp hike?
Several factors contribute to this surge, most notably the rise in the number of drivers and heightened inflation rates. In 2023, approximately 243.4 million Americans held a driver’s license, up by 4.8 million from 2022. This increase in drivers amplifies the risk of minor accidents and claims.
Additionally, inflation has significantly impacted car ownership expenses. The Consumer Price Index shows notable hikes in car-related costs: insurance up by 20.3%, maintenance by 7.1%, and repairs by 10.3%. As more drivers hit the road with more expensive vehicles, these rising costs naturally lead to higher insurance premiums.