Auto insurance keeps inflation high, holding consumers ‘captive’

According to the US Bureau of Labor Statistics, auto insurance has risen over 20% from a year ago, the largest jump since 1985. Consumer Federation of America Director of Insurance Doug Heller joins Yahoo Finance to contextualize the spike in auto insurance prices. Heller outlines how the moment inflation hit and repair costs rose, insurance providers enacted “aggressive” rate hikes: “These rate hikes that get put into place, they roll out over the course of policy years. We have people who still haven’t even seen the rate hikes that were announced in, say, January, December, even back into November, because their policy hasn’t renewed yet. I expect that we’re going to see another at least six months of people feeling the rate increases that have been announced over the last several months, before we even begin to see relief. Perhaps more of the problem is that the insurance industry kind of is in charge here. Because they’ve got the captive market of consumers, we find they’re really slow to pull back on their rates. ” For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live. Editor’s note: This article was written by Nicholas Jacobino