US auto policy costs rise again in June; still chasing key claims costs

US motor insurance policy costs rose again, increasing by 1.7% in June, but showed a relatively tight fit to some key claims cost inflation measures and a still-heavy gap to the pre-pandemic margin, the latest inflation reading from the US Bureau of Labor Statistics (BLS) has indicated.

Despite the strong monthly gain, the annual inflation rate on auto policies edged down slightly from the May all-time record to 16.9% as the take-off in policy inflation is now in the prior year figures.

The 17.1% annual increase in policy costs lags inflation in repair costs (19.8%), but offers comfort versus recent inflation readings in parts (3.6%) and volatile recent readings on used vehicles (-5.2%).

But cumulative rate gains since before the pandemic (end-2019) at 17.5% notably lags all measures of claims cost inflation over the same period. Vide the 40% gain for repair costs, a 23% gain in parts prices and a 43% gain in used vehicle prices.

The broader story of consumer price disinflation picked up pace in June, sending the headline inflation figure down a full point to 3.1%. the lowest annual reading since March 2021.

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