Why Texans’ auto insurance rates are going up

AUSTIN (KXAN) – “I’m just tired of giving my money away,” Jason Gibbons said.

Sitting in ATX Guitarworks, a guitar repair shop on Jones Road, he admits it’s getting harder to keep him strumming.

He’s facing a possible rent increase at his storefront and thinks the economy is affecting his customers.

“They have to prioritize, they have to make it a very low priority. Therefore, sometimes there are few people who enter the door,” he said.

Gibbons is also seeing a jump in personal accounts; his car insurance went up about 25% when he renewed his policy about two months ago.

“I don’t think so,” he recalled thinking. “I have no record. I’ve never had a parking ticket either. “I have never had a speeding license.”

Gibbons said a Progressive insurance agent told him the increase was related to inflation.

Rich Johnson with the Insurance Council of Texas said it’s the biggest factor driving up rates in the industry this year.

He said the average Texan saw a 20% increase.

Johnson said that while they’ve seen rates rise steadily since 2017, this is a bigger increase than usual.

“During the pandemic, we’ve seen the prices of these used cars skyrocket. This is the cost that the insurance company will pay if there is a loss or total car. And we haven’t really seen those prices come down that much,” Johnson said.

Joe Lamping, owner of Flamingo Automotive on Guadalupe Street, said he’s seen repair costs go up 10 to 15 percent.

He also pays his staff more.

“They need a living wage to live in this city,” he said.

According to insurance company Progressive, demand for auto technicians outstrips supply 5 to 1, driving up labor costs.

Lamping said the repair period is also over.

“There are challenges in the supply chain, we find that readily available parts are not always available when we want them,” Lamping said.

More people are turning to repairs, he said, as supply chain issues and inflation drive them away from buying new cars.

“We see that our customers who are considering buying a new car ask if they can use the car for a few more years. Most of the time we can do that,” Lamping said.

According to him, people usually want a new car after 100,000 to 120,000 miles. Now its customers are trying to get closer to 200,000 miles or more.

This year, Lamping said, they are seven to nine days behind on repairs. In previous years, it was two to three days.

Inflationary costs, labor costs, supply chain and repair delays are all factors in rising rates, according to Johnson.

“If your car is in the shop for, say, five days longer than it was three years ago, that’s five extra days your insurance company paid for that rental car,” Johnson said.

He also said that the increase in catalytic converter theft factors into your insurance rate.

“The latest statistics are in 2021, about 15,000 catalytic converter thefts, compared to 2019, about 3,400 – that’s a huge increase,” Johnson said.

He said the prices of catalytic converters have “gotten wild” because of the minerals they contain, such as platinum.

“The precious metals contained in it are produced abroad, and some of them are produced in Ukraine, Russia and the territory,” he said.

Johnson said stolen converters are not only a headache and expense for customers, but also a problem for insurance companies because they are usually an insured loss.

“And not only do you replace the catalytic converter, but you know they’re getting in that car and driving it. So that’s a repair you have to do on top of the cost of the actual catalytic converter,” he explained.

Kelley Blue Book, an automotive industry company, says that replacing a stolen catalytic converter and repairing theft damage to a car can add up to $3,000 or more to an insurance claim.

“I drive probably 4,000 miles a year,” said Gibbons, who doesn’t plan to renew with Progressive. “So, I don’t know, it’s just an example of things getting out of hand.”

That means less money for food and entertainment, including a childhood passion for playing the guitar.

“I’m just tired of paying and paying and paying and … I feel helpless,” Gibbons said.


Johnson suggests calling your auto insurance company to review your insurance premiums.

“Maybe you have too much coverage on your car,” he said. “If you have students, do they have good grades? Take a defensive driving course, pay $75 or something like that, you can save a few bucks there.

Texas also has a large and competitive insurance market, Johnson said.

“We have hundreds of insurance companies. So the number one thing we tell people is to shop; Go online… get an insurance agent, do some sort of shopping around to shop around on your behalf from multiple companies,” he said.

If you plan to keep your current vehicle longer than intended, try to budget for maintenance, Lamping said.

“Things always wear out, things always need service and replacement. So we really try to get our customers involved in the maintenance program so that we can budget and plan so that we can keep and maintain that vehicle and make it a solid reliable vehicle for many years to come.”

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