HMM: Why auto insurance costs are rising at the fastest rate in 47 years.

New data out this week showed auto insurance costs rose 20.6% from the prior year in February, matching January’s increase as the most since December 1976, when costs rose 22.4% over the prior year.

On an annual basis, motor vehicle insurance costs rose 17.4% in 2023, the most since a 28.7% increase in 1976, according to data from the BLS.

The sticker shock hitting many American drivers is being driven by a rise in accidents, the severity of accidents, and geographical factors combining to create a perfect storm and push costs higher.

The most alarming factor driving insurance costs higher is more severe claims.

“In general, the numbers of crashes, injuries, and fatalities are up, and inflation has made the cost of repairs more expensive,” AAA spokesperson Robert Sinclair told Yahoo Finance.

According to this report from last year, “Average Age of Light Vehicles in the US Hits Record High 12.5 years.” Older cars are more likely to require new brakes, new tires, etc. I wonder if that’s behind the increase in accidents.