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: 4 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; unfortunately, this trend is set to continue.

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 increase in car accidents throughout Texas didn’t rise by much recently, under 1%, however, the bad news is that it’s still an increase.

There are more people that have moved to the Lone Star State creating a situation where the roads simply have more vehicles, leading 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.

Severe Weather

In 2023, alone, Texas faced more than $20 billion in damage from storms, setting a record throughout the United States no state wanted to break.

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.

Severe weather is happening more often and causing more damage, so insurance prices go up to keep up.

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 simply compare top-rated carriers and enroll with the company offering the lowest rate for the best coverage. Click the button above for a no-obligation, free quote to compare rates in your area to save.


1. Texas Car Crash Statistics 2023 Vs. 2022, Varghese Summersett, PLLC. Accessed May 2024. https://versustexas.com/blog/crash-statistics-in-texas/

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