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What's Happening in the Texas Auto Insurance Market?

Updated: Mar 11, 2022

Almost every company you represent had a rate increase and chances are, there will be more.

You've seen in the news,

'Inflation surges 7.5% on an annual basis, even more than expected and the highest since 1982," reads a CNBC headline this week.

Inflation is at its worse in 40 years and this directly impacts insurance MGAs and carriers.

Physical Damage coverage has long been the balancer for carriers offsetting and lowering loss ratios against bodily injury. For example, State Farm shows a 100% loss ratio in bodily injury for the last three years.

Body shops lack of labor, rising labor costs, and lack of skilled labor are delaying repairs and causing repairs to cost more. Replacement part costs have skyrocketed due to lack of supply. In addition, claimants are staying in rental cars longer and rental cars cost are twice as much as two years ago for daily rates. Further, for the first time in history, some used vehicles now have more value than when purchased, a nearly 40% rise in value - making a total loss a hard hit to carriers. In addition, last year miles driven were the highest ever, and the more people drive the greater the loss frequency.