Higher Rates Kick In for Texas High-Risk Car Insurance

Graph showing TAIPA application volume for 2000 to 2011Policyholders who already have or are going to get high-risk car insurance policies with Texas’s state-run program now face higher rates that kicked in on July 1.

Regulators announced in May that the Texas Automobile Insurance Plan Association (TAIPA), the state-run coverage program for high-risk motorists, would be increasing overall rates by 24.1 percent.

The program offers private passenger auto policies for motorists who have been turned away by other insurers because of traffic violations or incidents on their driving record.

Most of the increase is to bodily injury liability coverage, which increased by 31.9 percent overall. Overall rates for property damage liability coverage increased by 20 percent overall.

The average base rate, depending on location, for a policy with minimum bodily injury and property damage liability is $578 under the new rate structure, with premiums varying between $289 and $2,459 depending on driver class and location.

To qualify for TAIPA, the program requires a motorist to have been rejected by at least two other insurers. The program offers a maximum of $60,000 in bodily injury coverage per accident and $25,000 in property damage coverage. It also offers optional personal injury protection up to $2,500 and UM/UIM coverage matching liability limits.

TAIPA has seen a smaller number of drivers enrolling in the program over the past half-decade, with the pool of TAIPA enrollees shrinking 37 percent between 2005 and 2011.

In 2011, almost 7,400 drivers were enrolled under TAIPA, but that number was nearly 16 percent less than in 2010, according to the Association’s annual report. There were also fewer applications, the volume of which fell almost 14 percent.

About Ben Zitney
Benjamin Zitney has been covering the auto insurance industry for the past 2.5 years. Before coming to Online Auto Insurance News, he produced an extensive company history of the 30-year-old California Joint Powers Insurance Authority and worked at the Cal State Long Beach Daily Forty-Niner as a reporter, copy editor and news editor.

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