From Dow Jones & Company:

The cost of the average car insurance policy has increased by 20.3% since last year, according to the Bureau of Labor Statistics. This is the largest one-year increase in insurance costs since 1976, with the average 6-month policy costing Americans $780.28 in December. Soaring repair costs and climate-driven disasters are chief factors contributing to this rise, with hurricane-prone Florida seeing some insurers abandon the state altogether. Electric vehicles (EVs) are also more expensive to repair, particularly Tesla models. Hertz, a prominent rental company, recently cited high repair costs as a reason to downsize its EV fleet.

As repair costs for cars continue to rise, the average cost of the average 6-month car insurance policy in December was 20.3% higher than the previous year, making it the highest one-year increase in insurance costs since 1976. The average cost for Americans was $780.28.

The increase in auto insurance surpassed any other element in the Consumer Price Index, the government’s primary measure of inflation, which showed overall inflation of 3.4% over the same period. This increase can differ from state to state, as state laws control liability in accidents. Soaring repair costs and climate-related weather events have played a role, with Florida’s hurricane-prone climate affecting insurance rates.

Electric vehicles are also contributing to the rise in insurance costs, making up 7.6% of new car purchases in the US last year. Tesla vehicles, in particular, are costly to repair, which has led some insurers to write off even lightly damaged models. This has impacted Hertz’s decision to downsize its Tesla fleet.



Read more: Why car insurances costs have gotten so high