Fair Or A Grift? Why Are Texas Car Insurance Rates So Incredibly High?

If your auto insurance rates have increased significantly, you are not alone.

As of the beginning of 2023, policies have increased an average of 20% statewide, with some insurance companies raising their rates by as much as 30%.

I doubt that gives you any comfort or solace, but at least you know it's not your fault you had a major increase... unless you recently got into an accident. So is this just a case of insurance companies giving us the grift, or are there good reasons for the price hike? Let's take a look.

Like so many things, corporations are pointing the finger at an easy scapegoat: the pandemic. Everything is more expensive post-pandemic, and if you feel like some of that is inflated by corporate greed, I'm right there with you. However, insurance companies are citing some very specific pandemic reasons for the hike that do seem to justify at least some of the hikes.

The first reason is obvious: people are driving more than they did during the pandemic, so more accidents are going to happen, statistically speaking. And since insurance is a collective thing- we all pay for it in the end. Not quite so obvious is that people seem to be driving worse as well, perhaps they forgot how to drive during that time.

Another pandemic related-reason is overall inflation and supply chain issues making car repairs and replacement incredibly expensive, which of course gets passed on to us. This is also true for healthcare costs for people who are injured in auto accidents.

An oddball reason you may not have thought of- increased severe weather in Texas. It's an El Nino year, and cars are getting destroyed in severe weather events like tornados and hail storms. Not only is it expensive, but it's also unpredictable, which is something insurance companies do not like at all and are perhaps overcompensating for.

Another oddball reason: catalytic converters keep getting stolen.

And finally, another reason is that fewer drivers can afford to carry insurance and those of us that do have it are paying for them. Infuriating? Yes. Will it get worse? Most likely.

Before you give up and start riding the bus, there are plenty of ways to save on car insurance, but they do require some work and some research on your part. The best advice? Drive attentively and defensively. Let's get those accidents, and those rates, down.