US motor insurance costs surge again in April, severity metrics keep pace

US motor insurance policy costs rose another 1.4% in April, rendering a 15.5% annual rate of inflation, a tight fit to resurgent costs in motor vehicle repair and replacement used vehicles, the latest inflation reading from the US Bureau of Labor Statistics (BLS) has indicated.

The 15.5% annual inflation rate on policy costs is up half a point from the prior month reading and would be an all-time high were it not for the May 2021 jolt from 2020 pandemic rebates. Annual readings hit double digits in September 2022 while rebounding from a low at the turn of 2021/2022.

Select severity measures were also on the rise for the April reading, increasingly putting paid to recent hopes for outright disinflation in parts and repair costs.

Motor vehicle repair costs are back on the rise, rising 1.7% in April to render a 20.2% annual inflation reading, a 2.8 point jump from March and the second highest reading behind January 2023.

Parts and equipment costs rose at their highest monthly rate in five months, but that rendered a lower annual rate of growth at 5.8% when taken against the prior year gallop. Body work costs rose 8.8% year on year.

More notably, used vehicle prices surged in April, up 4.5% for the month and cutting the annual deflation reading nearly in half to negative 6.6%.

Disinflation across the broader spectrum of US consumer prices has slowed, BLS noted. Costs for shelter, used vehicles and gasoline helped buoy price growth in the April reading.

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.