A continued rise in inflation has caused an increase in car insurance rates for Michigan drivers.
“I’ve seen premium increases in the range of 5%, 10% and even 15%,” Doug Heller, insurance expert with the Consumer Federation of America, told Marketplace. “That throws a huge wrench in the budget of people who are really just struggling to get by.”
Not only have car prices increased, but so has the cost to repair them and the medical costs for people injured in car wrecks, Marketplace reported.
Many car insurance companies are raising premiums 6 to 8% or by double digits, the Wall Street Journal reported.
Allstate, a home and auto insurer, is raising rates by an average of 7.1% in 25 states, according to the Wall Street Journal. The company also confirmed that more increases are coming.
Some consumer activists are against the increases because they say that insurance carriers recorded profits during the COVID-19 lockdowns. Carriers argue that they temporarily reduced programs and other premiums in response to the pandemic.
According to the most recent report from Bankrate, the average annual cost for minimum coverage car insurance in the state of Michigan is $948, while the average annual cost for full coverage is $2,309. In the year 2021, the average annual cost for full coverage car insurance in the state of Michigan was $2,105, Coverage.com reported.
On Jan. 12, the Bureau of Labor Statistics (BLS) released the consumer price index (CPI) data for the month of December. The data showed a 7% annual increase, which is the largest increase in 40 years, since 1982. The CPI also rose 0.5% from November 2021, signaling that inflation has continued to grow on a month-to-month basis, BLS reported.
The CPI is a measure of inflation, which takes into account the cost of dozens of common consumer goods.
