Texas car insurance rates have exceeded the national average, creating a transportation affordability crisis.
According to Axios Dallas, the national average for full coverage car insurance costs about $2,329 annually as of June. However, in January 2021, the average price of car insurance in the U.S. was significantly less at $1,601.
Private transportation costs have increased by 5% between May 2023 and May 2024, partly due to high insurance rates and gas prices. Texas car insurance rates are about $2,672, almost $343 more than the national average.
In 2023 alone, Texas car insurance rates have increased by 25.5%, per the San Antonio Express-News.
Although Texas car insurance rates have risen, states such as Connecticut, Maryland, and South Carolina have exceedingly expensive rates, ranging from $3,336 to $3,598 annually.
The cost of car insurance has increased in Texas for several reasons, including the prices of new and used vehicles, car parts and labor, the influx of accidents, and poor driving records.
Since the prices of new and used vehicles have increased after the pandemic, insurance companies are having to write checks for larger amounts to replace and fix totaled vehicles, according to the consumer research company J.D. Power.
Additionally, with inflation, supply-chain issues, and advanced materials in new cars, some parts are taking longer to arrive at dealerships. Insurance companies are also taking the hit of spending more than usual on customers’ rental cars.
Texas isn’t doing itself any favors. The Lone Star State has a history of reporting a high number of severe collisions, which increases medical costs for insurance companies. In 2022, according to the Texas Department of Transportation, there were 15,299 serious car-related injuries from crashes.
As reported by DX, Dallas is a major contributor to the number of crashes in Texas and is a main hub for commuters going to and from work.