Auto insurance

Texas home and auto insurance rates are rising rapidly

The price you pay for auto and home insurance is rising rapidly as Texas underwriters raise rates to keep up with inflation, rising wages for mechanics and soaring construction costs, according to documents obtained by Axios.

The big picture: Average car insurance premiums have plummeted during the pandemic as Texans have driven significantly less and companies have cut rates to retain and win customers.

  • But at least three major insurance companies are now warning Texas insurance agents to prepare for higher premiums.

What they say : “A rate increase is necessary to address the deteriorating profitability of the personal auto program,” says a Germania Insurance bulletin to agents marked “confidential” that outlines the factors behind a 9% auto rate increase. statewide, on average, as of this month.

Details: Brenham-based Germania’s newsletter focuses on the frequency and severity of claims.

  • “The number of claims has increased as driving habits continue to normalize post-pandemic. Texans are driving more and having accidents.”
  • “Auto repair shop costs continue to rise for vehicle parts and labor, prices for new and used vehicles remain high, and delays in receiving parts have lengthened the claims process. .”

insurance company Travelers sing a similar tune and told officers that weather conditions, labor shortages, supply chain issues and an increase in fatalities – likely due to distracted driving – drive up car premiums.

Meanwhile: Safeco Insurance observed that “some policyholders will understandably balk at higher premiums,” according to another industry bulletin obtained by Axios.

  • “To set expectations and help mitigate renewal purchases,” the company tested the use of a “How inflation affects your premium” pop-up link in online customer accounts as a warning about rising prices. rates and the factors that drive them.

Zoom out: The Insurance Information Institute said homeowner premium rates rose 12.2% on average nationally from 2017 to 2021.

  • And on the automotive side, catalytic converter theft claims increased by 1,215% between 2019 and 2021 – with Texas reporting the second highest number of catalytic converter theft insurance claims in the nation.

Be smart: “We always encourage consumers to shop around, take advantage of discounts offered by an insurer, and take a close look at their insurance needs and deductible levels,” Albert Betts, executive director of the Insurance Council of Texas, a trade group , says Axios.

  • “What consumers are seeing now is a reaction to the increased loss and increased component costs of a claim, repair and replacement of damage to a home or automobile,” Betts said. .
  • By the numbers: US auto insurers spent about $1 in claims and expenses last year for every $1 they collected in premiums, according to the Insurance Council of Texas.

What there is to know: The Texas Department of Insurance has a helpful purchasing tool, as do companies like The Zebra.

What we are looking at: If and when inflation slows, supply chain issues are resolved, and everyone learns to drive without texting (which is against the law in Texas), will insurance rates go down?