Texas Auto Insurance Rates Are Increasing

Apparently the weak regulation and poor oversight of Texas insurance companies that has kept us at number one or number two in the nation for highest homeowner insurance premiums is not enough punishment for Texas consumers. Now we may be in a race to have the highest automobile insurance premiums in the country also. The latest statistics place Texas at number eleven among the states, and at number five for the collision portion of auto coverage. The report was detailed by the Dallas Morning News. Here are excerpts from the newspaper article:

The high cost of fixing damaged cars and trucks in Texas has pushed up the price of auto insurance in the state to 11th highest in the nation, according to a new study analyzing premiums across the country.

The study by the National Association of Insurance Commissioners shows that the price of collision coverage — the portion of an insurance policy that pays to repair damage after an accident — has been climbing in Texas and now ranks as the fifth highest among the states.

By contrast, the amount paid for liability coverage — which has been a target for advocates of limiting lawsuits — ranks 20th among the states.

Overall, Texas drivers paid an average premium of $1,022 a year for insurance, well above the national average of $901. Louisiana drivers were charged the highest premiums in the country, an average $1,270 a year. A dozen states have premiums above $1,000. Rates in the study were based on 2009 data, the most recent nationwide figures available.

Insurance industry spokesman Mark Hanna attributed the high cost of collision coverage to the large percentage of uninsured motorists in the state, as well as increased charges by auto body shops.

The average auto insurance premium in Texas has been creeping up in recent years. It once was ranked near the middle of the pack among the states — unlike the rates for homeowners insurance, which have been among the highest in the country for several years.

“We are starting to see in auto insurance rates what we have seen in homeowners rates for a long time — continuous increases,” said Alex Winslow of Texas Watch, a consumer group that tracks insurance issues in the state.

He added that state officials should be wary of the price increases. “I don’t know of any factors that have changed to justify the kind of upward trend we’re seeing,” Winslow said.

Winslow also said the relatively lower cost of liability protection calls into question the arguments that policyholders suing insurers are the driving force behind increasing premiums.

A study by The Dallas Morning News last fall showed that many drivers in the Dallas area saw their insurance rates jump by an average of 8 percent during 2011. Industry representatives attributed the higher premiums to increased medical costs and new minimum limits for liability coverage in Texas.

AT A GLANCE: Factors that affect auto insurance premiums

Driving record and claims history: A good driving record and no at-fault accidents reduces premiums.

Age and, for younger drivers, marital status: Male drivers younger than 25 and unmarried women younger 21 pay the highest rates, while drivers over 50 may get discounts.

Where the car is kept: Rates are higher in urban areas than rural areas because drivers in urban areas have more accidents and auto thefts.

Type of car: Collision and comprehensive rates are higher for luxury, high-performance and sports cars.

Car’s primary use: Rates for cars driven solely for pleasure are lower than rates for cars driven to and from work or used for business.

Credit score: Most companies use the driver’s credit score to decide whether to sell a policy and what to charge, with a better credit score bringing lower rates.

Whether the driver lacked insurance: Companies may charge more if the driver was uninsured in Texas for more than 30 days in the year before the driver applied for coverage.

Discounts that reduce the cost of auto insurance:

Defensive driving courses.

Driver education classes for young drivers.

Students with good grades.

Parent or family whose young driver is away at school without a car.

Two or more cars on one policy.

Policy renewal with good driving record and no at-fault claims.

Concurrent homeowners policy.

Vehicle options such as anti-lock brakes and anti-theft devices.

3 Comments For This Post

  1. Charles Young
    September 24th, 2012 | 6:59 pm

    I am very upset with The Hartford. My auto insurance is scheduled to increase by $400.00 in November 2012. The reason given was not satisfactory. I switched to The Hartford last year through AARP for $909.00 a year for full coverage. Now they want $1300.00 a year for the year coming up. I’m searching for a new auto insurance carrier. I am also letting everybody over 50 know don’t be fooled by the AARP.

  2. Bob Kraft
    September 25th, 2012 | 9:38 pm

    Those increases are very steep, even for insurance companies. That sounds more like health insurance than auto insurance. Shop around, but be sure you get full coverage — including uninsured motorist coverage and Personal Injury Protection coverage. Good luck to you.

  3. Escobar
    October 11th, 2012 | 7:27 am

    Car insurance is probably just as important as your health insurance. It can get really expensive for you if you get into an accident and not have an insurance in place. However, you need to be careful with the company that you choose. It is advisable that you talk to different ones and get feedback from your friends and family.

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