Many of the largest auto insurance companies in Texas will be raising their rates as a result of losses and new liability limits that will have been implemented with the start of this year.
Several of the insurers are citing the new liability limit rules exclusively as the cause of their increases. According to Mark Hanna from the industry trade group called the Insurance Council of Texas, these regulations require that drivers within the state must carry policies that will provide coverage for up to $25,000 for property damage per accident, up to $60,000 for bodily injury per accident, and for up to $30,000 per person for bodily injuries.
He stated that since the insurers were not permitted to alter their rates ahead of the implementation of the new requirements, which began on January 1 of this year, “a lot of what you’re seeing is companies adjusting rates to factor that in.”
A spokesperson named Jerry Johns from another trade group, Southwestern Insurance Information Service, said that rising physician service and hospital fees connected to auto collisions have also played a role in the insurance rate increases. He stated that these price hikes will be modest, but will still be required in order to be able to cover the increases in costs in these various areas.
According to the Consumer Price Index report in August – which was released by the U.S. Department of Labor – when compared to the year before, there has been a 3.3 percent increase in medical costs. Moreover, there has been an overall 3.8 percent CPI increase.