Insurance rates rising fast in Texas

The price you pay for auto and home insurance is quickly rising as Texas underwriters raise rates to keep up with inflation, escalating mechanics' wages and soaring construction costs, per documents obtained by Axios. The big picture: Average auto insurance premiums dropped during the pandemic as Texans drove far less and companies slashed rates to retain and win customers. But at least three major insurance companies are now warning Texas insurance agents to brace for higher premiums.

What they're saying: "A rate increase is needed to address deteriorating profitability of the personal auto program," states a Germania Insurance bulletin to agents marked "confidential" that lays out the factors for a statewide 9% auto rate increase, on average, effective this month. Details: The bulletin from Brenham-based Germania zeroes in on claim frequency and severity. "The occurrence of claims has increased as driving patterns continue to normalize after the pandemic. Texans are driving more and having accidents." "Auto repair shop costs continue to increase for vehicle parts and labor, new and used vehicle prices remain high, and delays in receiving parts has lengthened the claims process." Insurance company Travelers is singing a similar tune and has advised agents that weather, labor shortages, supply chain issues, and an increase in the number of fatal crashes — likely due to distracted driving — is driving up car premiums.