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Insurers raising auto rates

Some of the state's larger auto insurers are raising rates statewide, citing losses and new liability limits implemented at the start of the year.

Many of the increases are the result, in part, of new minimum liability rules that require Texas drivers to carry polices that cover up to $30,000 per person for bodily injury, up to $60,000 for bodily injury per accident, and up to $25,000 for property damage per accident, said Mark Hanna of the Insurance Council of Texas , an industry trade group.

"Companies weren't allowed to change rates before the new requirements went into effect Jan. 1," he said, "so a lot of what you're seeing is companies adjusting rates to factor that in."

Jerry Johns, a spokesman for trade group Southwestern Insurance Information Service , also cited rising fees for hospital and physician services related to automobile accidents.

"The increases are going to be modest but necessary to pay for these increasing costs," he said.

The August Consumer Price Index report from the U.S. Department of Labor shows medical costs increased 3.3 percent over the previous year. That compares with an overall CPI increase of 3.8 percent.

Some policyholders, including many insured by State Farm, will see decreases, a sign that the auto insurance market remains competitive, Johns added. That means consumers can benefit from shopping around and asking about discounts, he said.

At least four insurers have implemented rate changes statewide this year:

Allstate hiked rates 3 percent for 350,000 customers in its Allstate Fire and Casualty unit. The increase, which will mean an additional $3 in average monthly premium, was the first increase in three years, Allstate spokesman Joe McCormick said.

USAA recently filed notice with state regulators of an auto rate hike averaging 8 percent statewide. It will apply to about 12 percent of its 611,000 Texas policyholders and adds about $7 a month to the average premium starting in December as policies renew, USAA spokesman Paul Berry said. The increase averages 8 percent in Harris County as well.

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