Sun. May 19th, 2024
Your car insurance is driving inflation

Your car insurance is driving inflation

By:

MEMPHIS, Tenn. – If you need evidence of inflation, look no further than your glove box.

Motor vehicle insurance has skyrocketed by 22 percent over the past year.

“The cost of auto claims has soared since the pandemic began in 2020, and it hasn’t slowed down,” said Mark Friedlander, a spokesman for the Insurance Information Institute (Scroll down for advice on how to lower your monthly rate).

“It’s not good news,” said John Gnuschke, a Memphis economist. “Inflation is still a problem.”

The Federal Reserve has one tool to fight inflation: Raising interest rates.

Since the pandemic, the Fed has kept interest rates high in the hopes that spending will slow.

The goal is to make everyday life more affordable for Americans. However, inflation has remained stubbornly high.

According to the Consumer Price Index, life is about 3.5% more expensive than a year ago.

“It’s highly unlikely that we’re going to see the interest rate cuts anytime soon,” Gnuschke said.

Seniors on a fixed income are struggling to afford what they need.

“Everyday life is very expensive, especially for retirees like myself,” said Marsha Sherrod, a Whitehaven resident.

Diabetics like Anoxsioux Alexander are finding it more and more difficult to afford insulin.

“They’re still making us pay more and more money per year for things that we need to live,” she said. “It’s really something that just needs to change.”

The cost of shelter has also increased by 5.7 percent, year over year.

Jamie Johnson said this is ‘absolutely not’ sustainable for the average Memphis resident. At the Memphis Public Interest Law Center, she advocates for renters across Shelby County.

“The quality of the housing they’re getting for that already really high rent (is) shocking,” she said. “The market’s not working in multiple ways.”

How to lower your car insurance rates:

FOX13 has spent the past year reporting on how significantly car insurance rates have increased.

Here are some tips we originally shared last July:

  1. Bundle your policies – Consider the savings of bundling car, home or renters’ insurance
  2. Ask about discounts – Ask about a low mileage, safe driver, military or student discount
  3. Raise your deductible – You’ll pay more out of pocket for a crash, but less for monthly coverage
  4. Take a defensive driving course – Older and younger drivers may see rates drop
  5. Install a telematics device that monitors your driving habits – Be aware that you’re trading data for a discount
  6. Shop around – You can choose a new insurance company at any time
  7. Buy a cheaper car – A clunker is cheaper to insure than a hot rod
  8. Pay for small repairs out of pocket – Insurance companies may drop coverage if you make multiple claims
  9. Consider the value of collision coverage on older vehicles – If your vehicle is ten years or older, collision coverage might no longer be worth the monthly investment.

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