The Consumer Price Index for auto insurance rose 4 percent for January compared with a year ago, according to the U.S. Department of Labor.
CPI numbers from the department showed that the cost of motor vehicle body work for January compared to a year ago had risen 4.1 percent.
Steve Weisbart, senior vice president and chief economist for the Insurance Information Institute mentioned the increase in body work prices and remarked that it will have an impact on claims. "So, that's probably a good part of the explanation why auto insurance is up," he said
Loretta Worters, also with I.I.I. said another suspect cause of the increase in prices is increases in litigation and those costs.
Mr. Weisbart remarked that "the Bureau of Labor does not pretend this is an exact science" and the CPI numbers might be less than fully accurate.
He said data from the Insurance Services Office on auto damage claim frequency and severity for the first three quarters of 2008 shows in general that auto claim frequency is down, "but severity dollar amounts, on average, are up higher than frequency is down. So there are fewer accidents but they are costing more."
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