ECTOR COUNTY, Texas (KMID/KPEJ) – In the last calendar year, a ton of Texans have received a rude awakening when it was time to renew their auto insurance.
The Texas Department of Insurance says that on average, the statewide, individual auto insurance rate increased by almost 24% in 2022, and most of the West Texans who spoke to ABC Big 2 News say that their first question when they saw the increase was, ‘Why?'”
“I was shocked the last time, most definitely. It skyrocketed on me so it was a big difference for me,” said Odessa resident, Xzavier Niño.
And the recent hike in Lone Star State auto insurance rates has also created headaches for insurance agents who want to keep their customers happy, and Permian Basin insurance providers are no exception.
“It’s actually been the highest increase in the last 20 years that we’ve had here, so we’ve definitely seen our fair share of customers coming in stating, ‘I’ve had no accidents. I’ve been a great driver,’ and they still got that rate increase,” said Isabel Corralez, a manager and agent with the Torres Insurance Agency in Odessa.
So what’s behind this sudden spike in auto insurance rates? Corralez says there are a lot of factors at play. But she believes the biggest one is the sizeable increase in claims that happened as Texans emerged from Pandemic lockdowns.
“There has been an increase in claims. We used to keep a loss ratio of 22%. Now it’s about 67% and in the last couple of years it’s hard to bring it down below that,” said Corralez.
But there’s more behind the skyrocketing insurance rates in Texas, and the Insurance Council of Texas has theories why. They tell the Houston Chronicle that our country’s recent labor shortages, supply chain issues, and the rising cost of car parts and car repairs also cost insurance companies, which in turn cost their customers.
“The value within the vehicles to fix them most times, they end up being total losses because the cost to fix them ends up being a lot higher than declaring a total loss,” said Corralez.
But just because auto insurance rates have increased throughout the Lone Star State doesn’t mean West Texans are out of luck when it comes to saving money, and Corralez says that shopping around can still make a big difference.
“Definitely shop it around because there are companies that also had a rate increase, just not as high as some other companies,” said Corralez.
And that’s advice that plenty of West Texans have already followed.
“There was a bit of a jump and it led to me switching who I get my insurance through,” said Andrews resident, Britton Grissom.
Another way motorists can save money on car insurance is if they install an app offered by insurance companies that monitors their behavior on the road, by Corralez warns that can be a double-edged sword.
“It really just depends if you’re going to put in that extra work to make sure you’re driving good because it can help and it can also hurt you at renewal time. It does usually give you a good 10 to 15% discount when you first purchase that policy, but if you’re constantly on your phone, the app actually monitors your phone use, it monitors how quickly you accelerate, how quick you break,” said Corralez.
And when it comes to finding other ways to save on your car insurance, Corralez recommends bundling your auto insurance with home or renter’s insurance.