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More broadly, the cost for many auto parts has been increasing due to supply-chain disruptions during the pandemic. The shortage in auto parts and the decrease in production of new vehicles are increasing the demand and costs for rental cars. These higher prices are therefore increasing claims costs for auto insurers. (Credit: oobqoo/Adobe Stock) More broadly, the cost for many auto parts has been increasing due to supply-chain disruptions during the pandemic. The shortage in auto parts and the decrease in production of new vehicles are increasing the demand and costs for rental cars. These higher prices are therefore increasing claims costs for auto insurers. (Credit: oobqoo/Adobe Stock)

According to the Labor Department, the U.S. is experiencing the largest increase in consumer prices since the height of the global financial crisis in September 2008. At the same time, the insurance industry is experiencing exacerbated inflationary pressures in homeowners and auto insurance lines, stemming from rapidly increasing prices associated with consumer goods and services that are relevant to the industry.

Prices for items such as construction materials, auto parts, rental cars, and medical and legal costs have been or are increasing at an even higher rate than overall consumer prices. As a result, this is impacting the insurance industry and marketplace through higher claims costs and increased upward pressure on premiums.

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