Texas Hikes Auto Insurance Rates on High-Risk Drivers

Motorists who get policies under Texas’s state-run coverage program for high-risk drivers will see higher premiums for bodily injury and property damage liability this summer.

The Texas Automobile Insurance Plan Association (TAIPA) recently announced a 24.1 percent overall rate increase for bare-bones private passenger automobile policies that goes into effect on July 1.

TAIPA is a safety-net program for motorists who are searching for Texas car insurance but have been denied coverage by two or more insurers, usually because of spotty driving records or numerous traffic violations.

The overall increase came from hikes to bodily injury liability of 31.9 percent and property damage liability of 20 percent. There were no rate changes announced for personal injury protection or uninsured/underinsured motorist (UM/UIM) coverage.

The program offers up to $60,000 worth of bodily injury coverage per accident and $25,000 in property damage coverage, as well as an optional $2,500 for personal injury protection and UM/UIM that matches liability limits.

Under the proposed rates, the average base rate for a policy with only minimum bodily injury and property damage liability is $578, though actual premiums can vary between $289 and $2,459, depending on the territory and driver class.

The program’s pool of high-risk drivers has consistently shrunk over recent years. The number of TAIPA enrollees in 2011 was almost 16 percent less than in 2010, according to filing documents. That downward trend was almost identical to the trend in the previous year. Enrollment declined 37 percent between 2005 and 2011.

New York also recently announced a 21.4 percent overall premium increase for its program covering high-risk motorists. Drivers renewing coverage under the plan in June and afterward will see increased rates.

About Matthew Morisset
Matthew Morisset is a proud alumnus of the University of Redlands, where he obtained a degree in English Literature. Utilizing his passion for analysis and writing, Matthew looks for important trends in the auto insurance industry and their implications for consumers and the market as a whole.

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