Texas Auto Insurance Rates Down, Low-Credit Drivers Suffering


The median six-month auto insurance premium rate in Texas has gone down to $744.00, which translates to a 14.2 percent decrease statewide.

Texas Auto Insurance Rates Down, Low-Credit Drivers SufferingOn the average, male drivers pay $773.25 for their premium rates while their female counterparts pay $722.69. Texans below 19 years old remain the costliest motorists to insure at $1,580 while motorists 75 and above pay the least for six-month policies at $653.75. This makes teenagers pay 140 percent more than senior motorists.

Statistics further reveal that men pay seven percent higher than women. As of this week, Texas remains on the 18th spot for affordability factor while Massachusetts is still the cheapest place for Texas auto insurance. Louisiana is found out to be the most expensive place to insure a vehicle.

Majority of Texans have reason to celebrate over the double-digit decline in their auto insurance rates but many motorists are still looking for better news and lower rates. As noted by finance specialists, many Texas drivers are paying significantly higher than other motorists because of their low credit scores. Studies reveal that low-credit motorists are paying 35 percent more on premium rates. Same goes for homeowners who have trouble over their credit rating.

Analysts found out that, in some cases, low-credit motorists pay double for similar coverage people with good credit have. Consumers say such discrepancy in price continues even if records show that they have the same claim history with other motorists.

However, insurers refuse to give in to the pleas of debt-trouble motorists, saying that without scoring, everyone will have to pay higher rates.

Consumer advocacy groups contend that such underwriting practice is not fair, especially to low income Texans who tread very thin lines between credit and debt. They add that it is likewise unfair for minorities whose short credit history is the primary reason for their poor ratings. Advocates also cite sudden account closures by banks as another reason for consumer scores to drop through no fault of their own.

Some state legislators are planning to stop insurers from using scores in determining premium costs. In fact, they came very close to it back in 2003. However, the bill was not able to walk through senate floor and legislators chose to impose limits instead. These include banning insurers from penalizing policyholders because of thin credit line and from using unpaid medical bills or major life crises (such as divorce or death in the family) as factors for increasing premium rates.

Advocates say legislators have not yet done enough to protect Texan motorists and majority of its consumers. They propose that state legislators follow examples set by Maryland and California which banned the practice totally.