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Why Car Insurance Rates in Texas are Set To Rise Further in 2023

The price of car insurance, like so many other things, has been increasing in price recently. But prices have risen particularly high in Texas, making it tougher for motorists to keep their vehicles insured. So what's behind this change, what will it mean for the future, and -- perhaps most importantly -- what can drivers do about it?

The State of Texas Auto Insurance in 2022

According to the Texas Department of Insurance (TDI), most Texas auto insurance companies reported their plans to increase rates over the course of the year. 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%.

One piece of good news is that even with these rate hikes, Texas has auto insurance rates comparable with the national average -- as reported by Ross Martin at The Zebra, the average yearly premium in Texas is $1,584, just 4% above the national average. But that percentage may continue to get bigger as insurance premiums continue to rise.

Predictions for Texas Car Insurance in 2023

Unfortunately, it looks like premiums will continue to go up into this next year. Industry experts are predicting that Texas motorists are likely to see another 8 to 10 percent increase in 2023. While not exactly unprecedented, it is a bigger rise than normal. These numbers are confirmed by the Insurance Council of Texas, which has been monitoring auto insurance premiums in the state since 2018.

What's at the heart of these rate hikes? For one thing, there's the recent inflation, which is raising the price of everything everywhere. Vehicle purchase prices are up, even for used vehicles, and the cost of labor has also gone up. This is on top of the already-rising cost of vehicles and vehicle equipment -- vehicles are more sophisticated than ever before, with safety features and high-tech add-ons that can significantly raise the price of replacements and repairs.

Additionally, supply chain issues are still plaguing industries everywhere in the wake of the COVID-19 pandemic, making it more difficult to get replacement parts and vital equipment.

Another issue making insurance premiums more expensive is the recent spike in catalytic converter thefts nationwide. The parts contained in catalytic converters have become rare and difficult to obtain, meaning they're much more of a target for thieves.

Some of the factors affecting car insurance rates aren't universal, but more local -- where you live can make a huge difference in how much you pay for your insurance. For example, urban areas are far more populated and have a much higher traffic density, which means more potential for accidents, and thus higher risk for insurance carriers -- meaning higher premiums for you. On the other hand, certain rural areas with higher-than-usual speed limits can also pose an increased risk of accident, so insurance rates might be higher there.

A higher-than-usual rate of car theft compared to the national average is another reason why Texans may end up paying more than other states when it comes to car insurance. And some location factors have nothing at all to do with driving, but natural disasters -- Texas is prone to wildfires, hurricanes, tornadoes, and winter storms, all of which can cause property damage and medical costs -- which are, again, passed on to the consumer.

What You Can Do About Your Car Insurance Premiums in Texas

So what can the typical Texas motorist do to help keep their premiums from going up so much? How can you find the best cheap car insurance in Texas? While some factors are entirely out of the driver's control, there are some steps you can take to help make sure your premiums don't go up more than they need to:

  • If you're in the market for a new car, consider putting it off for a while or buying used instead, in order to avoid higher insurance rates.
  • Keep a clean driving record. Getting a DUI conviction in Texas will almost certainly mean a huge rate hike -- according to the numbers at The Zebra, such a conviction will raise your rates by 64%, or $1,276 a month.
  • Take a defensive driving course and / or install new safety or anti-theft features on your car.
  • If you're willing to switch auto insurance companies, do some shopping around and compare quotes. There are plenty of easy-to-use online tools that can help you with this.
  • If you're a member of certain professions (doctor, nurse, health care professional, first responder, police officer, teacher) you might be eligible for certain discounts from your carrier. Similarly, if you're a college student with good grades, you might be able to get a discount for that as well. All told, the typical car insurance company has dozens of potential discounts that you might qualify for -- so consider getting in touch with them and seeing what's available.

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