The following information
outlines Texas' rating system, offers money-saving tips
and describes how your driving record affects your
premium.
What are County Mutual Companies?
Most county mutuals specialize in
high-risk drivers and generally charge more than other companies. Check your policy's
Declarations page for the words county mutual. If you and your covered
family members have good driving records, you probably don't belong in a county mutual
and should shop for coverage
with a standard or preferred company that offers lower rates.
What are
standard and preferred companies?
A preferred company usually offers the lowest rates.
A standard company's rates are somewhat higher than
a preferred company's.
A high-risk company sells at high rates to drivers
with poor driving records or other problems. In Texas,
a high-risk company is likely to be a county mutual.
Many insurers actually are groups of companies. An
insurance group might consist of a preferred company, a
standard company and a county mutual.
What factors affect my
individual premium?
When a company applies its rates to your particular
situation as a driver, the resulting total is your
premium. Several factors determine the premium you are
quoted or charged:
1. Your age and, for younger drivers, your marital status. Unmarried male drivers under 21 pay the highest rates. Also paying higher rates are single men between 21 and 25 and unmarried women under 21. On the other hand, drivers
over 50 may get discounts from some companies.
2. The county where you keep your auto. Texas is divided into
52 rating territories. Because they have more accidents and auto thefts, urban
counties usually have higher rates than rural areas.
3. Your auto. Collision and comprehensive rates are highest for
luxury cars, high-performance cars and sports cars. Rates also reflect the fact
that some cars damage more easily or cost more to repair than others. On older,
paid-for, lower-value cars, you should consider dropping collision insurance. An
insurer will not pay for repairs that cost more than the car's value. When repair
costs exceed the car's market value, the insurer will total the car and
send you a check for its market value.
4. How you use your auto. Rates are higher for autos driven to
work or used in business than for cars used only for errands and pleasure trips.
5. Your deductibles, if you have collision and comprehensive, are your out-of-pocket share of the cost of a claim. You can reduce
your premium by raising your deductibles.
6. Surcharges. Penalties are added for accidents and certain traffic violations.
7. Discounts. Some are required by the state, others are optional. Ask your agent.
8. Credit Scores. Some companies also use credit scores.
9. Other Factors. These are among the top factors used to determine rates, but other factors may be considered as well.
How can I check out a company or agent?
A low rate is no bargain if you buy from a fraudulent
company or agent. To find information on auto insurance companies in Texas, call
the Texas Department of
Insurance (tdI) at:
1-800-578-4677 in Austin, (512)463-6169.
The Texas Department of Insurance can tell you whether an agent or company is authorized
to sell auto insurance in Texas. They can also tell you a
company's complaint record and its letter grade from a
national financial rating service.
How does my driving record affect my premium?
1. A good driving record can save you money.
Preferred companies, which usually charge the lowest rates,
accept only applicants with good driving records.
2. A good driving record can get you a discount from
some companies when you renew your policy. Ask your
agent.
3. Tickets and accidents can mean higher premiums if
companies classify you as "high-risk." You could end up in a county mutual or the Texas Automobile Insurance Plan Association (TAIPA), also
known as the assigned risk plan. TAIPA provides basic liability coverages for drivers rejected by at least two insurance companies.
Motorists in the TAIPA pay higher surcharges and higher
rates than other drivers, but sometimes less than
drivers insured by county mutuals.
4. Accidents or major driving offenses can add
surcharges to your premium. Surcharges are mandatory and stay on your premium for
three years.
