If you’ve had to renew your auto insurance recently, you may have had an unpleasant surprise. The average statewide rate for personal auto insurance soared 23.8 percent in 2022, according to the Texas Department of Insurance.
The jarring increase in insurance premiums comes after several years in which rates were essentially flat. Ben Gonzalez, a TDI spokesperson, broke down some numbers: in 2018, the average rate increase was just 1.8 percent, and in 2019 and 2020, average rates actually declined slightly.
“After the pandemic it just shot right back up,” Gonzalez said. “More cars back on the road; severity of accidents; and then all this inflationary stuff with cars themselves, new and used — and the same with the repairs on them.”
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Rich Johnson, director of communications and public affairs for the Insurance Council of Texas, a nonprofit trade association, offered a similar assessment, pointing to several overlapping trends that have combined to raise the risks insurers face.
“People really got bad driving habits during COVID, and they just continued. The frequency and severity of accidents actually increased,” Johnson said. “Linked to that, for a while there rental cars were super expensive. The cost of used cars, and cars in general, has dramatically increased. There was a labor shortage, there was supply chain issues, and the cost of repairing a vehicle these days is so much more expensive than it was 10 or 15 years ago.”
Even if you haven’t had any car trouble yourself, he added, that can affect your insurance rate.
“I always like to say that insurance is a team sport,” Johnson said. “When you’re paying your insurance, it’s not a piggy bank that you’re putting money into to save for your repairs. Everybody’s paying for everybody else’s risk.”
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Under state law, there is no cap on auto insurance rate increases in Texas, but insurers are required to file their rates for review with the department of insurance. In 2022, according to TDI, the agency requested more information on 75 percent of the 2,590 rate filings submitted, but ultimately none were disapproved.
“If there’s any kind of question about what the data is that’s presented, there’s a back and forth communication with the companies, but they usually end up in a place that’s going to be supported by the data,” Gonzalez said.
Drivers feeling the pain accordingly should keep in mind that the statewide average increase in 2022 is just that — an average. The Dallas Morning News reports that while Geico raised rates in Texas by 53.9 percent in 2022, State Farm raised rates by 17.1 percent.
“If you are seeing rate increases, we have a pretty strong insurance market and we always encourage people to shop,” Johnson said. “There’s hundreds of companies doing business in Texas. Shop around and look for the best rate.”
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