Car owners and motorists living in the state of Texas will have to live with higher insurance costs in 2011 if the state’s department of insurance has its way. According to sources from the Texas auto insurance industry and other experts, the state government is poised to introduce another round of changes to the minimum liability amounts required by law.
State officials last increased the minimum liability amounts on April 1 last year. Even then, officials have hinted at another increase in the coming years. Those changes are expected to take place on the first day of the year in 2011. Sources disclosed that the department of insurance and other policymakers are eyeing 2011 as the target year for yet another round of premium hikes.
At present car owners in Texas need to have at least $25,000 in minimum liability protection for a single person injured in a car accident. By 2011, however, this amount would increase to $30,000. Policyholders must also have a minimum of $50,000 set aside by their insurance providers for injuries sustained in a car crash. Finally, the state government currently requires motorists to have $25,000 as the minimum liability amount for damaged property.
The new plans to increase insurance minimums also calls for the amount required for injuries in a car crash to increase by $10,000 to$60,000. However, car owners will get to retain the $25,000-minimum liability amount for property damage. The decision to retain the amount was met with mixed reactions from consumer rights groups and insurance providers.
According to consumer advocates, keeping the old amount would help Texans already struggling to keep their finances afloat. Insurers, on the other hand, say that by retaining the amount, policyholders may have to partially pay for replacing or repairing damaged vehicles. Providers argue that most cars sold nowadays are priced more than $25,000. By pegging the property damage liability amount to the said figure, policyholders may have to pay for anything more than the prescribed amount.
Some officials and car insurance industry analysts say that the proposal to increase the minimum liability amounts is justified because of rising medical costs. With the debate on health care still raging across the nation, experts say that more expensive medical expenses warrant the need to increase the required minimum amounts. Even so, insurers say that they will be forced to increase premiums to cope up with more expensive costs.
