Why you may see your insurance rates go up soon

As if the rising cost of gas and freight weren’t enough, get ready to add another thing to your list of rising monthly bills: insurance costs. Home and auto insurance premiums are expected to increase, according to the top insurance companies in Texas.

Much of that depends on drivers returning to their pre-pandemic driving habits, Axios reporter Asher Price told the Texas Standard. Meanwhile, parts and labor to repair vehicles are more expensive due to inflation. On the housing side, supply constraints and high construction costs are also pushing up premiums.

This transcript has been lightly edited for clarity:

Texas Standard: It looks like insurance companies are trying to prepare Texans for rising premiums. What is putting pressure on them?

Asher Award: There are a number of factors going on, both on the auto insurance side and the home insurance side. During the pandemic, you will remember that the highways were empty during the first months of the pandemic, the first year of the pandemic. And insurance rates took a big drop, and now they’re going back up again because people are back in their cars, getting into accidents and having to take their car in to get fixed.

Meanwhile, there are all these supply chain issues and labor shortage issues. So your car mechanic is getting paid more than he or she was before; parts to fix your side mirror cost more than they used to. So this is all adding up to the insurance claim. And that’s why insurers say they should raise your auto rates.

How much increase can consumers expect?

Insurance rates will increase by at least 9% if you are a customer of Germania Insurance. They have issued a bulletin that they could see such a large increase. The average auto premium I think was around $1,400 in Texas at the start of the pandemic. At the end of last year, it was up to $1,600. And so, you’ll see that number growing as well.

Home valuations have gone up – is that something insurance companies are trying to cover as well?

Yes, thats how it is. I mean, on the home side, you have some of the same problems as on the auto side. I mean, anyone who has tried to buy a new home, of course, that price has gone through the roof. But even if you’re just trying to fix up your home, the cost of lumber remains high. The amount you have to pay, the person fixing your house or the plumber if you have a problem at home you need to make a claim for, all these things have gone up.

» RELATED: When it comes to Texas home prices right now, you can put the historical data in the trash

Meanwhile, one other thing I should say on the automotive side is that there has been a big problem with catalytic converter theft. Probably many listeners have either had this happen to them or know someone who has had a catalytic converter stolen from the back of their car. And so, that’s driving up premiums on the auto side as well.

Once you start talking about the kind of record levels of inflationary increases that we’ve seen, well, you can expect that to kind of cascade throughout the economy. Is there anything consumers can do to find better prices?

I will say one quick thing, which is that some of this is unique to these markets, like distracted driving leading to higher premiums. This is becoming more common among Texans. Just on a personal level, you know, try to practice safe driving.

But when it comes to shopping for insurance, the Texas Department of Insurance has a handy tool for finding where you can compare rates. And also there are companies like Zebra and other companies where you can type in the type of type of insurance you need and online and they’ll spit out different options for you.

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