Inflation rates for motor vehicle insurance increased by 1.2% in July, which is 1% higher than the national average inflation rate of 0.2% reported by the U.S. Bureau of Labor Statistics in the most recent Consumer Price Index (CPI) summary.
Over the last year, the all items index has increased 2.9% nationwide, according to the report. Motor vehicle insurance costs have increased 18.6% across the country in the same time frame.
Although the national inflation rate saw a decrease of 0.2% in the previous month of June, motor vehicle insurance costs still increased that month by 0.9%.
Across the country, car insurance rates have risen 46.2% since January 2020, according to the Wall Street Journal. While some politicians have pointed to climate change and corporate greed as the cause of rising insurance costs, the “actual culprit” is a combination of inflation and lawsuit abuse. “Unscrupulous plaintiff attorneys” in Florida developed a “playbook” of filing a large volume of insurance-related lawsuits, which ultimately drove up the cost of insurance for policyholders.
Gov. Ron DeSantis signed HB 837 into law last year, which was intended to decrease the number of “frivolous” lawsuits in the state that ultimately drive up the costs of goods and services, according to a press release. The reforms encompassed by HB 837 include eliminating attorney’s fee multipliers, standardizing the calculation of medical damages, and reducing the statute of limitations to two years for medical damages.
According to a May 17 press release from the Florida Office of Insurance Regulation (OIR), property insurance rate filings for 2024 are experiencing a downward trend for the first in years. OIR attributed the insurance market’s stabilization to “historic legislative reforms” of the last several years. Signs of the strengthening market include ten companies filing for zero percent rate increases, another eight companies filing rate decreases to take effect this year, and eight new companies being approved to enter the state’s insurance market.