Job growth, wage increases, and robust business expansion are all contributing to a generally positive economic picture. Additionally, inflation has significantly decreased from its peak in 2022. However, consumer sentiment remains surprisingly negative, even though it’s gradually improving.
One significant factor contributing to this sour mood is the ‘sticker shock’ associated with certain highly visible costs, even as overall inflation cools. A prime example of this is the escalating cost of car insurance.
In January alone, motor vehicle insurance premiums jumped by 1.4 percent, and they’ve surged by 20.6 percent over the past year – the largest increase since 1976. This has created a substantial financial burden for the estimated 272 million private and commercial vehicles registered across the country. This rise in costs is also contributing to the less-than-optimistic outlook on inflation, which had begun to improve in the market earlier this year.
According to a recent private sector estimate, the average annual premium for full-coverage car insurance in 2024 is projected to reach $2,543. This represents a substantial increase compared to $2,014 in 2023 and $1,771 in 2022.
The primary driver behind this increase is straightforward: Cars and trucks have become more expensive, and consequently, so has the cost of insuring them.
