Why Texas Car Insurance Rates Are on the Rise

Summary: Drivers in Texas are facing more auto insurance rate increases due to a number of factors. While inflation is causing an auto insurance increase in Texas, there are other issues raising the risk for carriers and by extension, the premiums for motorists. Some things are out of your hands but there are ways you can save on your coverage despite outside factors raising rates. Estimated Read Time: 9 mins

If you drive in Texas, chances are you feel like you’re paying more and more for your car insurance premium these days. Well, that’s because you likely are.

Several factors contribute to an auto insurance increase in Texas. Price growth has slowed recently, but many of the pressures behind it haven’t gone away.

Understanding why your rates are going up can help you not only make sense of it all but also determine your options for saving money by minimizing potential premium increases.

There are ways to save on coverage and remain protected by adequate protection so that you don’t end up facing a large financial hurdle down the line.

Factors Causing the Texas Auto Insurance Rate Increase

The Texas auto insurance increase millions are facing across the state is a combination of several things. Some of the factors are out of your hands while others are more controllable.

Auto insurance is a business just like any other and the key for maintaining a business from the carrier’s standpoint is to manage risk.

When there is more risk, things go up and the many factors affecting premiums these days are pointing to unfavorable market conditions that drive the cost of insuring your vehicle higher.

Here are some of the key factors to keep in mind when facing an insurance rate increase in Texas:

Inflation Continues

Inflation is causing auto insurance rates to rise in Texas due to unfavorable economic factors that increase the operational costs for insurance carriers.

One significant factor is the rising cost of healthcare which makes more severe accidents even more costly along with the rising costs of labor and parts required to repair vehicles.

As inflation drives up the overall cost of living, wages for auto repair technicians also increase, leading to higher labor costs for insurance companies when settling claims for vehicle repairs.

Additionally, the cost of vehicle parts, such as replacement bumpers, headlights, and mechanical components, also rises with inflation, further adding to the expenses incurred by insurance carriers.

Healthcare costs contribute to the Texas car insurance increase in the same way. Inflation drives labor and medical supplies higher which can make already costly medical treatments even higher.

Furthermore, the increasing cost of new vehicles contributes to higher insurance rates. As the prices of new cars and trucks increase due to inflation, the insurance coverage needed to replace or repair these vehicles also becomes more expensive for insurance companies.

To cover these rising costs and remain financially viable, insurance carriers adjust their rates accordingly, leading to higher premiums for policyholders in Texas and beyond.

Overall, inflation’s impact on labor, parts, and vehicle prices collectively drives up auto insurance rates, highlighting the complex relationship between economic factors and insurance premiums.

More Auto Accidents in Texas

The good news is that the number of car crashes in Texas rose by less than 1% from 2022 to 2023, according to an analysis of state crash data; the bad news is that it was still an increase.

More people have moved to the Lone Star State. The U.S. Census Bureau estimates Texas had 31.7 million residents in 2025, up 8.8% since 2020. That means the roads simply have more vehicles, which can lead to a higher number of accidents.

The rise in auto accidents across Texas is causing auto insurance rates to go up.

More accidents mean insurance companies have to pay more for vehicle damage and medical bills, putting a big financial strain on carriers who in turn charge higher premiums to make up for it.

Factors like distracted driving and crowded roads make the problem worse. So, to keep insurance costs down, drivers need to practice safe driving habits.

While we can’t control how everyone around us drives, we can do our part in keeping the roads safe.

Furthermore, you’ll notice that many auto insurance companies offer discounts based on safe driving records.

Doing the little things, such as going the speed limit, driving without distractions, wearing your seatbelt, and driving sober can go a long way to protecting yourself, and others, and saving money in the process.

More Miles on Texas Roads

Texans are driving more. The Texas Department of Transportation reports that vehicle miles traveled in Texas rose from about 260.6 billion in 2020 to about 314.0 billion in 2025. More miles mean more exposure to crashes, even when the fatality rate improves. TxDOT also reports that traffic deaths fell 9.38% in 2025, to 3,769, but estimates the economic loss from motor vehicle crashes in Texas at $54.2 billion that year.

Costlier Vehicle Technology

Modern cars are safer, but they are also more expensive to fix. A AAA study found that advanced driver assistance systems, such as automatic emergency braking, blind spot monitoring and lane departure warning, can add up to 37.6% to the total repair cost after a crash because of the cost of replacing and calibrating sensors. Even minor damage to front radar or distance sensors can add up to $1,540 in repair expenses.

Uninsured Drivers

When an uninsured driver causes a crash, insured drivers’ own coverage often pays. The Insurance Information Institute estimates that 14.5% of Texas drivers were uninsured in 2023, ranking the state 19th in the country. That cost shows up in uninsured motorist premiums. Learn more in our article on whether insurance companies go after uninsured drivers.

Insurers Catching Up After Losses

Rate increases also reflect a period when insurers paid out more than they took in. Nationally, the private passenger auto insurance combined ratio, a measure of claims and expenses compared with premiums, was 111.3 for liability coverage and 113.4 for collision and comprehensive coverage in 2022, according to Triple-I data. A ratio above 100 means an underwriting loss. As companies raised rates, those ratios improved to 101.2 and 87.9 in 2024. The same source reports that the countrywide average auto insurance expenditure rose 14.0% to $1,282 in 2023, citing the National Association of Insurance Commissioners.

Are Auto Insurance Rates Still Rising?

After several years of sharp increases, price growth has cooled. The U.S. Bureau of Labor Statistics reported that the motor vehicle insurance index in the Consumer Price Index declined 0.8% in August 2026 after falling 0.3% in July. That is a national measure, and your own premium can still go up at renewal. Texas affordability also remains a concern: Triple-I, citing the Insurance Research Council, lists average auto insurance spending in Texas at 1.67% of median household income, compared with a U.S. average of 1.50%.

How Auto Insurance Rates Are Set in Texas

The Texas Department of Insurance auto guide explains that Texas law requires insurers to charge rates that are fair, reasonable and adequate for the risks they cover. TDI doesn’t approve rates in advance, but if it finds a company’s rates are too high, it can require refunds to people who were overcharged. Companies consider factors such as:

• Your driving record and claims history
• Where you live and where the car is kept
• The kind of car you drive and what it costs to repair
• How you use the car, such as commuting or business use
• Your credit, for companies that use it, although TDI says a company can’t turn you down or charge you more only because of your credit score

Some of these, like your driving record, vehicle choice and coverage options, are within your control.

Severe Weather

Texas leads the nation in hail. The Insurance Information Institute counted 902 major hail events in Texas in 2025, more than any other state, and the state also recorded 162 tornadoes that year.

Simply put, more severe weather in Texas means higher auto insurance rates for drivers and there are several threats available regardless of which part of the state you live in or the season at hand.

The Lone Star State faces hailstorms, floods, tornadoes, hurricanes, wildfires, and much more which can damage cars, leading to more insurance claims.

A Texas car insurance rate increase is used by carriers to cover these costs, insurance companies raise rates.

When severe weather causes more damage, insurance prices go up to keep up. Weather claims are paid under comprehensive coverage, so they affect that part of your premium most.

It’s important for drivers to have good auto insurance and to be ready for severe weather that may affect your vehicle but if you want to keep your costs down, you’ll need to compare rates among carriers.

How To Save on Coverage Despite the Texas Auto Insurance Rate Increase

The increases facing anyone with Texas auto insurance policies can be stressful but the best way to save is to compare carriers and choose the company offering the best value for the coverage you need. Get a no-obligation, free quote to compare rates in your area.

A few steps that help:

• Shop at renewal. Compare the same coverage limits and deductibles across companies. TDI’s HelpInsure.com lets you compare sample rates and see which companies use credit.
• Ask about every discount. Each company decides which discounts to offer, such as for safety equipment, defensive driving courses, multiple cars, bundled policies and a clean record.
• Review your deductibles. A higher collision and comprehensive deductible lowers your premium but means you pay more after a claim.
• Drop coverage you no longer need carefully. Collision coverage on an older car worth little may cost more than it’s worth, but keep liability limits high.
• Consider usage-based programs if you drive safely and not very much.
• Protect your record. Accidents and tickets can raise rates for years. See our guide on whether a hit-and-run claim raises your insurance.

If you have a teen driver, our guide to making car insurance cheaper for young drivers covers additional ways to save.

Example: Two Ways to Handle a Renewal Increase

Suppose a driver in Fort Worth gets a renewal notice with a higher premium. One option is to pay it without asking questions. The other is to call the agent, ask why the rate changed, confirm that discounts for defensive driving and a multi-policy bundle are applied, raise the comprehensive deductible to an amount they could afford, and get two or three quotes for the same coverage. The second approach doesn’t guarantee a lower price, but it ensures the driver is paying for the coverage they actually want.

Common Mistakes When Rates Go Up

• Cutting liability to the state minimum. TDI warns that 30/60/25 limits might be too low if you cause a serious accident, leaving you to pay the rest.
• Letting coverage lapse. A gap in coverage may make future insurance more expensive and is illegal if you keep driving.
• Comparing quotes with different coverage. A cheaper quote may simply have lower limits or higher deductibles.
• Dropping uninsured motorist coverage. With roughly one in seven Texas drivers uninsured, it can be valuable protection.

Frequently Asked Questions

Are auto insurance rates still going up in Texas?

Price growth has cooled nationally, with the CPI motor vehicle insurance index declining in July and August 2026. Individual renewals can still rise based on your car, location, driving record and insurer.

Why did my rate go up if I didn’t have a claim?

Rates reflect the cost of claims across all drivers, including higher repair costs, medical costs and weather losses, not just your own history.

Can TDI stop my rate increase?

TDI doesn’t approve auto rates in advance, but it can require refunds if it finds a company’s rates are too high. If you have a complaint about your insurer, you can contact TDI.

Where can I compare auto coverage?

Learn more on our Texas auto insurance page or request a free quote.

Sources:

1. Texas Car Crash Statistics 2023 Vs. 2022, Varghese Summersett, PLLC. Accessed May 2024. Versus Texas: crash statistics in Texas

• Comparison of Motor Vehicle Traffic Deaths, Vehicle Miles, Death Rates, and Economic Loss, 2003-2025, Texas Department of Transportation
• QuickFacts: Texas, U.S. Census Bureau
• Facts + Statistics: Hail, Insurance Information Institute (Triple-I)
• Facts + Statistics: Tornadoes and thunderstorms, Insurance Information Institute (Triple-I)
• Facts + Statistics: Uninsured motorists, Insurance Information Institute (Triple-I)
• Facts + Statistics: Auto insurance, Insurance Information Institute (Triple-I)
• Fixing Advanced Vehicle Systems Makes Up Over One-Third of Repair Costs Following a Crash, AAA Newsroom
• Consumer Price Index Summary, U.S. Bureau of Labor Statistics
• Auto insurance guide, Texas Department of Insurance
• HelpInsure.com, Texas Department of Insurance and Office of Public Insurance Counsel