US household auto policy costs accelerate further; cut margin gap
US automotive policy inflation accelerated further to another all-time record high further distancing halting claims cost inflation, the latest monthly reading from the US Bureau of Labor Statistics (BLS) has indicated.
Retail automotive insurance policy costs rose 2.1% in August, their greatest monthly increase since a mid-2020 rebound jolt, to render an all-time high annual inflation reading at 19.1%.
That put annual policy inflation ahead of repair cost inflation for the first time in recent memory, all well above inflation for other elements of their claims cost basket.
Mark motor vehicle repair costs up 1.4% in the month for a 17.0% annual inflation rate in August, body work up 7.1% year on year, parts inflation at 2.0% and used vehicles still in deflation after the early post-pandemic price surge.
Taken against pre-pandemic levels, the margin on household auto insurance may still have more to make up.
Insurance policy costs have now risen 28.9% against the same month from pre-pandemic 2019, a beat only to parts and equipment inflation, but still trailing a 38% price gain in used vehicles, a 42.8% increase in repair and a 31.4% increase in body work costs.
Taken against an average of key claims cost lines, the margin loss is single digit for only the second month and at the lowest level since April 2021.
For the broader consumer price inflation reading, a headline rate of 3.7% was the second consecutive uptick after a long disinflationary run from the mid-2022 inflation peak. Gasoline accounted for over half of the increase, BLS said.
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