Auto Insurance Rates Edge Upward for Some Texans

Tilted two car shotSome Texan drivers had better get ready to see a hike in their auto insurance premiums this August.

The Dallas Morning News reports that State Farm Mutual is planning to raise insurance rates by an average of 2 percent, a move that could potentially affect three million drivers. Another 230,000 Texans covered by the company’s high-risk policies will be forking over on average 6.8 percent more for their auto insurance.

The rate hike won’t be taking place without some opposition. Public Insurance Counsel Deeia Beck insists that State Farm’s reasoning isn’t enough to justify the increase in rates.

According to the Morning News, Beck wrote in a letter to the state insurance commissioner saying that State Farm Mutual has hiked up insurance rates three times in the past two years despite decreased expenses.

But the insurance giant holds the position that higher rates are justifiable. Kevin Davis, a spokesman for State Farm, told the paper that the insurance provider’s rates have dropped an overall 6.6 percent in the past six years.

The recent increase is being made “primarily to address rising costs associated with bodily injury liability claims, such as medical costs,” Davis told the paper.

A study released earlier this year by the Insurance Research Council corroborates the widespread increase of bodily injury costs to insurance companies. The study attributed this trend to hospitals’ “cost-shifting,” which is the inflation of billed medical costs so that hospitals can rely on payouts from private insurance companies instead of reimbursements from public health programs.

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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