Skyrocketing car-insurance premiums are pushing inflation higher

[Zorro]

Soaring insurance premiums, particularly for autos, are fueling rising consumer prices and complicating policymakers’ attempts to beat back inflation.

Inflation cooled for much of the year before picking up this fall, with insurance prices for autos, homes and medical care fueling 15 percent of the increase in overall consumer prices, economists say. A double-digit spike in auto-insurance prices drove the vast majority of that rise.

Indeed, November’s hotter annual inflation gain of 2.73 percent would have been much lower, closer to a 2.37 percent inflation rate, without the outsize increase to auto insurance.

“It is punching well above its weight for that contribution,” said Josh Hirt, a senior economist at Vanguard.

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