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Inflation is easing. Why is car insurance still so expensive?

Motor vehicle insurance costs are up more than 20% year-over-year

Inflation is cooling after a hot start to 2024, but it's still higher than policymakers would like, leading Federal Reserve officials to pledge Wednesday to hold off longer on easing interest rates.

One culprit: The cost of auto insurance.

Consumer Price Index data released early in the day showed U.S. inflation rose 3.3% year-over-year in May compared to a 3.4% bump in April. Costs for some of the needs consumers feel most - food, gas, utilities - held flat or dropped month-over-month, but other necessities, including housing and medical care, were still on the rise.

Auto insurance is one of the hottest remaining issues, jumping a whopping 20.3% over last year.


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