AUSTIN – The Insurance Council of Texas said several factors have contributed to a steady increase in the price of home and auto insurance in the years since the pandemic.
Rich Johnson, the council’s community director of communications and public affairs, said insurance companies have been slowly raising rates since 2021.
He said there would be a 20% increase in 2021 and a further jump of 10-15% in 2023. Johnson said the price change was an effort by companies to recoup losses incurred during the pandemic.
“Those COVID years, where there was pressure to keep rates down, are kind of catching up with us now. So for the most part, most insurers are going to be raising premiums,” Johnson said.
Johnson said since the COVID 19 closures, drivers have returned to the road with bad habits like speeding and distracted driving, which has caused more accidents and insurance claims.
He said these repairs are even more expensive for insurance companies because of the amount of technology in modern vehicles.
“10 years ago, if you rear-ended, say, an F-150, the best-selling car in Texas, it had a steel bumper. You hit it, it dented, it was fine,” Johnson said. “But now it’s plastic, the whole bumper has to be replaced, there’s probably five or six sensors sometimes and a backup camera.”
Austin resident Riley Anderson said he signed up for his insurance policy when he bought his car in 2021. During our interview, Anderson checked his insurance payments, which had been set to automatic. He was surprised at what he found.
“It was $180 for me and my fiancé, and I hadn’t looked at it until this interview. Now it’s $50 a month more than when I signed up two years ago,” Anderson said.
As for homes, Johnson said the rising cost of building materials has caused the rate to insure those homes to increase as well. Extreme weather in the state has also caused more damage to homes in recent years, resulting in more insurance claims.
Johnson said there can be several types of discounts that drivers can qualify for, and recommends that owners shop around several providers and consult the Texas Department of Insurance website for advice.
“It’s a competitive market, it’s a competitive business. So get out there and shop around,” Johnson said.
