Whether you live in Texas or have recently moved to the state, there is a good chance that you will be surprised by the housing and car insurance offers you received. Hence, there is no denying that car and automobile insurance is on the rise in Texas. So why are Texans paying more than the national average? Many homeowners have to pay higher home insurance fees even if they have not filed a claim. Car insurance premiums are rising even without a claim. So, what’s going on here?
Read on to find out why insurance is so expensive, what factors affect insurance, and how you can save on premiums.
Home owners insurance and rising premiums
Homeowners are realizing that rising material costs, supply chain disruptions are pushing premiums up an average of 4 percent. For example, higher material prices increase repair and building costs for insurance companies. Supply chain problems lead to a shortage of building materials like lumber. It costs more for insurers to pay to rebuild homes after an insurance claim is filed.
Texas has the fifth-highest average home insurance at $ 3.429. Wildfires, Storms, tornados, and the housing market boom are driving up values
How to save on insurance premiums
Homeowners can take proactive steps to lower insurance premiums.
- Adding wind mitigation to your homemaylead to a discount
- Bundling your home and car insurance can lower the premium
- Raising your insurance deductible from $500 to $1,000 may save up to 20%
- Similarly, smoke detector alarms, burglar alarms, and deadbolt locks may lead to discount.
- If your home is in severe weather condition area, you can install weather proof windows or replace the roof.
Some additional tips include:
- Ask for discounts if your family members are non smokers.
- Recently bought house can avail discount .
- Opt for paperless billing, or set up automatic payments.
- Building your credit score can also result in lower insurance rates.
- Similarly, get rid of high-risk items, like trampolines.
- Shop around for the best rates.
Why is car insurance so expensive?
If you’ve noticed that you’ve spent more in coverage in recent years, you’re not alone. Average car insurance costs have risen across the country. The key factors contributing to this shift are congested state roads, increased insurance requirements, high healthcare costs, high-risk drivers, uninsured drivers, and adverse weather conditions.
- Supplementary insurance requirement – Texas requires car insurance. To drive in the state, you must carry a policy meeting the state’s minimum liability requirements — property damage limits.
- Rising health care costs – If you are involved in an accident, insurance providers use premium paid by consumer to pay the costs. The costs covered include medical expenditure of injuries sustained by drivers and passengers – treatment required by other parties.
- Uninsured drivers – Although drivers are legally requiredto have insurance, 20% don’t carry insurance. The chance of being involved in an accident with a person not having insurance is higher as compared to other states.
- Severe weather risks – Difficult weather conditions are a common reason for car insurance claims, especially for drivers whose contracts include comprehensive insurance. Many of the weather risks that are common – including tornadoes and hurricanes – can damage your car to the extent that your insurance company can declare it a complete loss. In these cases, providers have to pay high claims. The frequency of these events is an important part of why car insurance is so expensive.
- Average age of drivers – Age is one of the important factors used by providers in determining the cost of vehicle insurance. Young students and seniors often pay more for the coverage than the average driver.
Why Auto Insurance rates are increasing?
- 18 weather related disasters with losses of $1B+ in 2021 to date
- Used car prices up 26.4%; new car prices up 9.8%
- Supply chain issues triggering shortage of chips and new cars
- Increase in severity of auto accidents; number of fatal car crashes up 18.4%
- Labor shortage; need for 3 times as many trained auto technicians
Average car insurance claim costs up 20%; parts costs up 6%
How to save on car insurance?
Because car insurance costs are so high, it is helpful to know the different ways to reduce your premiums.
- Shop offers – One of the best ways to find the lowest possible rates is to compare car insurance deals from at least three providers. For each offer, provide the same information to see which insurance company offers the best rates for your needs.
- Use a broker with an insurance comparison tool. With this tool, they can make the same comparison without having to go to different sites or agents to get quotes.
- Try bundlingyour policies – Insurance companies often offer insurance more than just cars. For example, bundling your auto insurance policy with your homeowners insurance could allow you to get lower rates than you would if you purchased your policies from different carriers.
- Avail discounts – Each insurance company has several discount programs for the buyer. Some offer discounts for installing an anti-theft in your vehicle or having a clean driving record. Some even offer discounts if you switch from another carrier. Contact your agent directly to find out what savings options you are entitled to.
- Increase your deductible – Your deductible plays an important role in car insurance rates. This is the amount you pay out of pocket every time you apply before your provider starts paying your expenses. Higher deductibles often translate into lower premiums – but keep in mind that this also means paying more and more out of pocket after an accident.
- Consider pay-per-mile insurance – Most car insurance policies use insurance statistics to determine your age, driving history, location and other factors. In pay-per-mile insurance, your bills are based on the number of miles you drive. This insurance is a cheap option if you do not travel often.
Start Saving on Your Insurance If any of the above savings options work for you, start shopping to see if you can get a better premium quote. Choose three to five different insurers, let them know exactly what you are looking for so you can compare apples to apples and get your offers. Let’s hope the most competitive insurance company wins! Although car premiums and household insurance will increase, there are ways to reduce prices.
The Walls Insurance Agency is located in Georgetown Texas & has the ability to shop your insurance needs with multiple insurance carriers to find you the best coverage and the best rate. We are available to answer any questions you have as well as assist you with all of your insurance needs. www.wallsinstx.com
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