WACO, Texas (KXXV) — Car insurance rates in Central Texas are climbing, and local agents say the number of uninsured drivers on the road is the main factor hitting wallets hard.
For many Central Texas drivers, the price of their vehicle is not the only thing causing sticker shock. In Waco, dealers tell me insurance costs are often among the biggest roadblocks before a customer can drive off the lot.
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Uninsured drivers are causing car insurance rates to climb for responsible drivers in Central Texas.
“It’s always the car insurance. We’ll be done basically with the paperwork and the customer’s ready to buy the car and obviously per state law they have to have insurance before they leave,” Justin Kramer said.
Kramer is the general manager at CMC Auto.
“What we’ve seen there is a correlation between the amount of uninsured drivers in the state of Texas and then with our increased rates. Basically, if one of our clients is hit by somebody without insurance, they typically will have to file it on their own policy and in turn, when that happens in you know frequently high numbers,” Jordyn Carey said.
Carey is a local auto insurance agent.
Insurance companies look at risk by ZIP code. When more drivers do not have coverage, those who do end up paying more to offset that risk.
“We see that we definitely see that people will come in to get rid of a vehicle because insurance is high. A lot of times it has to do with a young driver and they’re looking for particular vehicles so that the insurance isn’t too expensive for them,” Kramer said.
The Texas Department of Motor Vehicles says responsible Texans pay more than $900 million a year to protect themselves against drivers who do not have insurance. Right now, an estimated 20 percent of Texas drivers are uninsured.
“I think the price of the new vehicles is what’s driving customers to me more so than the insurance, but it does also play a factor,” Kramer said.
Whether someone is buying, selling, or just trying to hang on to the car they already have, higher rates are changing the way Texans shop.
“It does help to shop around from time to time because most of the insurance companies will reward you for being a good long tenured customer. So when another insurance company sees that they would want to, you know, obtain you as a customer,” Carey said.
Carey tells me rates are on a downward trend right now, making this the best time to get your car insured in Central Texas.
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Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.