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'I guess we have to embrace it': Average cost of auto insurance jumps by 22 percent

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Posted at 5:24 PM, Apr 11, 2024
and last updated 2024-04-11 21:01:18-04

KANSAS CITY, Mo. — Auto insurance is becoming more difficult for Americans to afford.

According to a recent Consumer Price Index report from the Bureau of Labor Statistics, the average cost of auto insurance jumped over 22 percent in the last year.

“I cannot imagine people that really has to take that up on, to cover it, with other expenses that might be going on,” said local driver, Brian Kim.

Kim says he pays $2,400 annually for his car that needs a lot of special coverage. He felt it was an acceptable rate to pay at the time, but like anyone else, he does not want to pay more than he already has to.

“Obviously I have to watch what I spend and the expenses on it, and if it comes to where I might have to let my car go, that might be a choice that I have to make later in time,” said Kim.

But it is a choice that many Americans are having to make now — pay for higher insurance, get rid of their car or break the law.

According to the Insurance Information Institute, 14 percent of drivers were uninsured in 2022. Local car insurance broker Tom DeMasters says that number is likely much higher now.

“People looking at their phones, I think that may be one of our biggest issues,” said DeMasters.

In addition to reckless driving habits, several factors account for the rate hikes. A series of bad weather events, supply chain issues and car re-insurance are factors, too.

“That’s the insurance companies that the insurance companies buy insurance from," DeMasters said. And re-insurance, they have to set their base rates, so that affects every insurance company."

DeMasters advises car owners to follow these steps to save money:

  • Pay in full if you can
  • Work to raise your credit score
  • Bundle your home and auto insurance
  • Consider letting your insurance company monitor your driving habits

“Everything else on the planet's going up, why wouldn’t it, you know? But if you’re driving a fancy new car, you gotta pay the price,” said local driver, Rick Propst. “That’s not good to go without insurance, you never know what’s gonna happen.”