Why Is Car Insurance So Expensive in Texas? 7 Factors That Affect Your Rate
If your Texas car insurance bill has gone up lately, you are definitely not the only person asking why.
You might have a clean driving record. You might drive the same car you drove last year. You may not have filed a claim at all. Yet when your renewal arrives, the price can still be higher.
So, what gives?
Car insurance rates are based on more than your individual driving history. Insurance companies consider many different factors when determining rates, including the cost of repairing vehicles, claim trends, where you live, the vehicle you drive, your coverage choices, and other rating factors.
Here are seven reasons your Texas auto insurance may be costing more, plus a few things you can do when it is time to review your policy.
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Cars Cost More to Repair
Today’s vehicles contain a lot more technology than they used to.
A relatively minor accident can involve cameras, sensors, radar equipment, LED lighting, and other components that may be expensive to repair or replace.
Even something as simple as replacing a bumper can become more complicated when that bumper contains technology used for parking assistance or driver safety features.
When the average cost of repairing vehicles increases, insurers may pay more to settle claims. Those higher claim costs can eventually contribute to higher insurance rates.
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Where You Live in Texas Can Affect Your Rate
Your ZIP code can play a role in what you pay for car insurance.
Insurance companies look at claim experience in different geographic areas. That can include factors such as accident frequency, vehicle theft, vandalism, weather-related claims, and the cost of claims in that area.
Drivers in a busy part of the Dallas-Fort Worth area, for example, may have a different insurance experience than someone living in a smaller Texas community.
This is one reason two people with similar vehicles and driving records can still receive very different insurance quotes.
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Texas Weather Can Be Hard on Vehicles
Texas weather is not exactly known for being gentle.
Hailstorms can damage thousands of vehicles in a short period of time. Severe thunderstorms can bring falling trees and flying debris. Flooding can damage vehicles, and strong winds can cause additional losses.
Comprehensive coverage is generally the portion of an auto policy that can cover certain types of damage that are not caused by a collision, subject to the terms, conditions, exclusions, and deductible of the policy.
When insurers experience a large number of weather-related claims, those losses can become one of many factors affecting insurance pricing.
If you have lived in North Texas for long, you probably already know how quickly a blue sky can turn into a hailstorm.
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Your Vehicle Makes a Difference
What you drive matters.
Insurance companies consider characteristics of the vehicle when calculating a rate. Depending on the insurer, that can include the vehicle’s value, repair costs, safety features, claims history, theft risk, and other factors.
Two SUVs with similar purchase prices do not necessarily cost the same amount to insure.
This is worth remembering when you are shopping for a new vehicle. Before signing the paperwork at the dealership, consider getting an insurance quote for the vehicle you are thinking about buying.
The difference between two vehicles might surprise you.
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Your Driving Record Is Only Part of the Equation
A clean driving record can certainly help, but it does not mean your rate will never change.
Insurance pricing considers many factors beyond whether you personally had an accident last year.
Depending on the insurance company and what Texas law permits, factors used in determining your premium can include your driving history, age and experience of drivers in the household, vehicle usage, location, coverage selections, vehicle information, and other underwriting or rating factors.
Some insurance companies in Texas also use credit information as one of the factors in determining your insurance rate. Not every company uses credit the same way, and Texas law places restrictions on how credit information can be used. Credit information cannot be the only factor used to determine whether to insure you or what rate to charge.
That is why saying, “But I haven’t had any accidents!” does not always answer the question of why a renewal premium changed.
Your individual claims history is important, but it is only one piece of a much larger puzzle.
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Your Coverage and Deductibles Affect What You Pay
Not every auto insurance policy provides the same coverage.
Higher liability limits generally cost more than lower limits. Adding comprehensive and collision coverage will generally increase the premium compared with carrying liability coverage alone. Your deductible choices can also affect your cost.
But price should not be the only consideration.
Choosing coverage simply because it produces the cheapest premium can leave you with less protection than you expected when an accident happens.
For example, liability coverage helps pay for covered injuries or property damage you cause to others, up to your policy limits. It does not generally pay to repair your own vehicle after an at-fault collision.
That is why it is important to understand what you are buying rather than comparing insurance quotes based only on the final price.
Not sure what all the different parts of your auto policy mean? Our Texas Auto Insurance 101 series breaks down liability coverage, policy limits, deductibles, and other common coverage questions.
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Insurance Companies Do Not All Price Risk the Same Way
This is one of the biggest reasons working with an independent insurance agency can be helpful.
Insurance companies have their own underwriting guidelines, rating models, discounts, and appetite for different types of customers.
A household that receives a competitive rate from one company today may find that another insurer is a better fit later.
That does not necessarily mean one insurance company is “cheap” and another is “expensive.” Their pricing can vary depending on the specific driver, vehicles, location, coverage, household, and other rating information.
At Neighbor’s Choice Insurance Agency, we are an independent agency. That means we can work with multiple insurance companies rather than representing only one carrier.
When appropriate, we can compare options to help you find coverage and pricing that fit your situation.
Why Did My Rate Increase If Nothing Changed?
This is probably one of the most common questions we hear.
From your perspective, nothing may have changed.
Same car.
Same house.
Same drivers.
No tickets.
No accidents.
But even if nothing changed on your end, the cost of insurance can change. Insurance companies consider both your individual rating factors and broader claim costs when setting premiums. Vehicle repair costs, medical costs, claim frequency, weather losses, and other expenses can affect what insurers expect future claims to cost.
Your insurer may also update its rates, subject to applicable Texas insurance regulations.
So, an increase does not automatically mean you did something wrong.
It does mean your renewal can be a good time to review your policy.
Can I See If My Insurance Company Changed Its Rates in Texas?
Yes. The Texas Department of Insurance provides a public tool where consumers can search home and auto insurance rate filings.
The database lets you look up filings by insurance company and see information such as the filing date, effective date, and estimated overall rate change.
If you are curious about recent filings from your insurance company, you can search the Texas Department of Insurance Home and Auto Insurance Rate Filings.
Texas Department of Insurance Rate Filings
Keep in mind that an insurance company’s overall rate change does not mean every customer will see that exact change. Your individual premium can be affected by a variety of rating factors.
What Can You Do About a Higher Car Insurance Rate?
If your premium has increased, you have a few options to consider.
Start by reviewing your current coverage. Make sure the vehicles, drivers, mileage, deductibles, and other policy information are accurate.
You can also ask whether you qualify for discounts that are available from your insurance company.
If you have home or renters insurance, it may be worth comparing the cost of placing multiple policies with the same company. Bundling can sometimes provide a discount, although it is not automatically the least expensive option for every household.
You can also review your deductibles and coverage limits with an insurance professional. Just be careful about reducing coverage solely to lower the premium. Saving a little today may not feel like much of a bargain if you discover after an accident that you do not have the coverage you expected.
Finally, you can compare options from other insurance companies.
If you are wondering whether there may be a better option for your household, you can request a quote from Neighbor’s Choice and let us do the shopping for you.
Request a Quote from Neighbor’s Choice
Should You Shop Your Car Insurance Every Year?
There is no rule saying you have to switch insurance companies every year.
In fact, changing companies just for the sake of changing companies is not necessarily helpful.
What can be helpful is reviewing your insurance periodically, particularly when you experience a large premium increase or something in your life changes.
That could include buying a vehicle, adding a teenage driver, moving, buying a home, getting married, changing your commute, or adding another vehicle to the household.
The goal is not simply to find the lowest number on a quote.
The goal is to understand what you are getting for the price you are paying.
Let Neighbor’s Choice Review Your Texas Auto Insurance
Insurance can be confusing, but shopping for it does not have to be.
Neighbor’s Choice Insurance Agency is an independent insurance agency located in Grapevine, Texas. We help our neighbors compare insurance options from multiple companies and understand the coverage they are purchasing.
If your car insurance premium has gone up, or you simply have not reviewed your policy in a while, request an auto insurance quote and let us take a look.
Request an Auto Insurance Quote
Because when it comes to insurance, it helps to have a neighbor on your side.
Frequently Asked Questions
Why is car insurance so expensive in Texas?
There is not one single reason. Auto insurance rates can be affected by vehicle repair costs, accident and claim trends, severe weather, where you live, the vehicle you drive, your coverage choices, your driving history, and other factors used by individual insurance companies.
Can my car insurance increase even if I have never filed a claim?
Yes. Your personal claims history is only one factor that can affect your premium. An insurer’s overall claims experience, rate changes, repair costs, your location, your vehicle, and other rating factors may also affect what you pay.
Does my ZIP code affect my car insurance rate in Texas?
Location can be one of the factors insurers use when determining auto insurance rates. Claim frequency, theft, accidents, weather losses, and other characteristics can differ from one geographic area to another.
Does credit affect car insurance rates in Texas?
It can. Some insurance companies use credit information as one of several factors when determining insurance rates. Not every insurance company uses credit information in the same way, and Texas law restricts how insurers can use credit information.
Will raising my deductible lower my car insurance?
A higher comprehensive or collision deductible may reduce the premium for those coverages, but it also means you would generally be responsible for a larger amount of a covered loss before the applicable coverage pays. Review the tradeoff before making a change.
Is bundling home and auto insurance always cheaper?
No. Bundling may qualify you for discounts with some insurance companies, but it does not guarantee the lowest total price. Comparing both the coverage and overall cost is important.
Can an independent insurance agent compare multiple companies?
Independent insurance agencies can represent multiple insurance companies, which can allow them to compare options among the carriers they represent. Available companies and coverage options vary by agency and customer.
Insurance coverage varies by insurance company and policy. This article is for general informational purposes and does not change, replace, or amend the terms of any insurance policy. Coverage is subject to the applicable policy terms, conditions, exclusions, limits, and deductibles.
Disclaimer: This blog is for general informational purposes only. Please remember, for specific information about your coverage and your policy, please read your insurance policy. If there is any conflict between the information in this article and the actual terms and conditions of your policy, the terms and conditions of your policy will apply.
Contact Us!
At Neighbor’s Choice Insurance Agency, we can work with you to make sure you’ve got the insurance coverage you need, while at the same time using all possible credits and discounts to make that coverage affordable. Just give us a call at 817-421-8866 or send us a note at [email protected]. We want to help you meet your goals, and make sure what’s important to you is protected!
