Mohave Today

The continuing rise of inflation is leading to higher car insurance costs for Arizona residents.

In the year 2021, the average annual cost for minimum coverage car insurance in Arizona was $482, while the average for full coverage was $1,517, according to Coverage.com. Bankrate reports similar numbers, with the average annual cost for minimum coverage car insurance in Arizona at $555, while the average annual cost for full coverage is $1,547.

The Wall Street Journal recently announced the adjustments that car insurers are making in response to the country’s rising inflation rates. Industry executives and analysts report that many car insurance companies are raising premiums 6% to 8% or by double digits.

"I've seen premium increases in the range of 5%, 10% and even 15%," said Doug Heller, insurance analyst with Consumer Federation of America, according to Marketplace. "That throws a huge wrench in the budget of people who are really just struggling to get by."

Allstate, a home and auto insurer, is raising rates by an average of 7.1% in 25 states, according to the Wall Street Journal. The company also confirmed that more increases are coming.

Some consumer activists oppose the increases, arguing that carriers recorded profits during the COVID-19 lockdowns. Carriers counter that they temporarily reduced programs and other premiums in response.

The rising rates of car insurance is being driven by rising rates of inflation.  On Jan. 12, the U.S. Bureau of Labor Statistics released the Consumer Price Index data for December 2021. The data showed a 7% annual increase, which is the largest increase since 1982.

The Consumer Price Index (CPI) is a measure of inflation, which takes into account the cost of dozens of common consumer goods, according to CNBC News.

The CPI also increased 0.5% from November 2021, signaling that rising inflation is a trend and has continued to grow on a month-to-month basis.