Soaring car insurance premiums force many low- to middle-income Texans to do without

Average car insurance rates have risen more than 50% across Texas since 2022, forcing many low- to middle-income residents to drop their insurance and risk legal penalties.

Approximately 12% of Texas car owners are uninsured, and a new study from Texas Appleseed and United Way of Greater Houston finds that, for Harris County, more than 14% of vehicles lack insurance.

"Social factors, like ZIP code, gender, and credit score, as well as gaps in insurance coverage, have oversized effects on the amount a person pays and are contributing to unaffordable pricing," the report said. "For example, in Texas, a driver with poor credit pays, on average, 3 to 3.5 times the premium of a similar driver with excellent credit."

Ann Baddour, director of Texas Appleseed's Fair Financial Services Project, said many of the uninsured drivers she and her colleagues interviewed felt like they were being set up to fail.

"In a place like Harris County, where thinking about going to work, taking your kids to school, having a job, going shopping, all of the day-to-day necessities, doing those without a car can be almost impossible, and so people feel stuck," Baddour said. "They feel like they need to have a car in order to function in their lives. And yet, the cost of the car, plus the insurance, and with the insurance cost going up and up and up, they're starting to feel like [they're] at a breaking point."

Monica Cabrera is one such driver. She said she was forced to drop her car insurance after her divorce sent her premiums soaring.

"Unless you're [a] married Caucasian male living in the burbs, like, you're not going to secure the best rate," Cabrera said. "My insurance went up over $150 per month due to my marital status changing, despite the fact that I had no accidents, and nothing changed as far as driving, as far as anything."

Cabrera, who is Black and lives in unincorporated Harris County, said she was anxious driving without insurance to get her son with special needs to school. Taking public transportation isn't an option, as she doesn't live anywhere near a bus line. Cabrera said she'll have to get new insurance by the end of the month, but she expects the disruption in her coverage means she'll have to pay even more than she did before.

"I understand how insurance works. I was a licensed adjuster," she said. "Why should someone get penalized if there's no additional risk reflected in their driving record?"

Car insurance affordability has become such a widespread problem that it has drawn the attention of Lt. Gov. Dan Patrick and Speaker of the Texas House Dustin Burrows. In issuing their interim charges to state lawmakers last week, Patrick tasked the Senate Business and Commerce Committee with strengthening regulatory oversight and access to affordable insurance. Burrows directed the House Committee on Insurance to look at consumer protections and find ways to reduce the costs of property and casualty (auto) insurance.

"With car insurance ... we all benefit when people are insured, but if we have a system that's making it nearly impossible for people in a financial bind to pay or afford even basic liability insurance, then that creates a problem," Baddour said. "So, I'm hopeful as the Legislature looks at this, as policymakers are concerned that people can share their stories and it can be part of a narrative, a way toward a solution."