Texas Drivers Face 23% Hike in Car Insurance

Texas auto insurance rates are expected to rise significantly this year as more insurance companies implement new rates based on severe weather events and newer car models become more expensive to repair.

According to the Houston Chronicle, Texas drivers are expected to pay 23% more, on average, for their annual full coverage insurances. According to the Texas Department of Auto Insurance, rates jumped 25.5% last year, the highest increase in the past decade.

The Chronicle’s report highlights that Texas car insurance is higher than in other states, due to different factors.

“Texas does have an above average fatal accident rate, slightly higher speed limits and greater population density, which can make dangerous accidents a little bit more common so insurance companies have to pay out more claims,” Chase Gardner, a data insight manager for insurance comparison website Insurify, told the Chronicle.

However, climate change is also driving insurance costs up.

Historically, climate risks have influenced homeowner insurance rates, but now, auto insurers are factoring in these risks as well. Comprehensive car insurance, which typically covers weather-related damages, is seeing a rise in rates due to the escalating costs of such events. A study by Insurify, reveals that billion-dollar climate events increased by 56% from 2019 to 2023 compared to the previous decade, costing the nation over $123 billion during that period.

The National Oceanic and Atmospheric Administration (NOAA) told the Chronicle that it’s expecting a rise in billion-dollar weather events.

“As we experience tornadoes, hail, and flooding in places where they weren’t necessarily a major threat before, the increased frequency and severity of these events will need to be considered in pricing,” Betsy Stella, vice president of carrier management and operations at Insurify, said.

In addition to weather-related risks, car theft is also driving up insurance costs. Texas, second only to California, reported over 115,000 vehicle thefts last year, marking a 10% increase. Furthermore, the rising cost of car repairs, especially for newer models equipped with advanced safety technology, is adding to the financial burden. The Bureau of Labor Statistics reports a 38% increase in car maintenance and repair costs over the past five years.

To navigate the rising insurance costs, experts advise drivers to explore discounts, review their coverage, and consider pay-as-you-go insurance plans, especially if they drive less than 10,000 miles annually.