What Affects Car Insurance Rates?

Filed rating inputs decide a Texas premium

What affects a Texas auto rate is a fixed list of filed inputs: the driving record, the drivers in the household, the vehicle, the garaging county and the coverages selected. An insurer applies a rate structure it has filed with the Texas Department of Insurance to those facts, and the premium falls out the other end.

Every insurer files its own rates, so the same facts run through different structures and land in different places. That is why no page can tell a Texas driver what a policy will cost.

Each input on that list is checkable before an agent checks it. A driver who reads the declarations page and the driving record first knows which factor is doing the damage, which is a different question from what the policy will cost.

Driving record and claims history

Driving record is the one rating input on a Texas auto policy built entirely from what a driver has already done.

A Texas auto filing counts four record items:

• At-fault accidents, dated from the loss
• Moving violation convictions, dated from the conviction rather than the citation
• Comprehensive claims such as hail, theft or glass, weighed separately from at-fault collisions
• A lapse between policies, which breaks a continuous coverage history

Each item is counted for a period the insurer set in its filing, then stops being counted. Length of the period sits in that filing rather than in a negotiation.

Age, experience and the drivers on the policy

Age and driving experience are separate rating inputs, and both apply to every licensed driver in the household rather than to the policyholder alone.

Three facts about the drivers shape the calculation:

• Years licensed, which is what makes a new driver expensive regardless of record
• Marital status and household composition, which appear as rating factors in some filings
• Which driver is assigned to which vehicle, on insurers that rate by assignment

Everyone in the house who drives belongs on the policy. A licensed driver left off the application is an underwriting problem at renewal and a coverage argument after a claim, which is a worse outcome than the rating factor would have been.

The vehicle and the miles it covers

The vehicle is rated on what it costs to repair and how often vehicles like it are involved in claims, not on what it cost new.

Five vehicle facts feed the calculation:

• Year, make, model and trim, matched by the seventeen-digit VIN
• Repair cost for the body structure, the glass and the driver assistance sensors
• Theft experience for that model
• Safety equipment and crash test performance
• Annual mileage and whether the vehicle is driven to work, for work, or neither

Mileage is the input drivers estimate wrong. An honest annual figure belongs on the application, because a mileage estimate that does not match the odometer at renewal gets corrected at renewal.

Where the vehicle is garaged

Texas Insurance Code §2253.001 stops an insurer that subdivides a county into rating territories from charging any subdivision more than 15 percent above another for identical coverage, and 28 TAC §5.9960 lets it exceed that only on a rate that is actuarially sound and supported by data filed with the Texas Department of Insurance.

County rating is why an identical driver and vehicle price differently across a metro boundary. Garaging is a fact about where the vehicle sleeps, not about where the owner works or where the title was issued.

A P.O. box is not a garaging address. A Texas auto rate is built from a physical address, and Aulona Insurance Group cannot place a personal auto risk garaged at a P.O. box.

The coverages and deductibles you choose

Coverage selection is the input the driver controls outright, and it changes what the policy is rather than how the insurer reads the driver.

Coverage selection comes down to four choices:

• Liability limits above the 30/60/25 state minimum (Texas Transportation Code §601.072)
• Collision and comprehensive, and the deductible on each
• Personal injury protection (PIP), offered and rejected only in writing (Texas Insurance Code §1952.152)
• Uninsured and underinsured motorist coverage, under the same offer and written rejection rule (Texas Insurance Code §1952.101)

Dropping a coverage is not a discount. Dropping a coverage moves the exposure from the insurer back onto the household, which is a trade worth making on purpose rather than by accident.

The Texas version

Texas permits insurers to use credit-based insurance scores in personal auto rating and puts two limits on it. Texas Insurance Code §559.051 allows the use, and §559.052 forbids an insurer from declining, canceling or non-renewing a Texas personal policy on credit information alone, without considering some other underwriting factor independent of it.

Texas also files everything. Texas Insurance Code §2251.101 requires an insurer to file its rates, rating manuals and supplementary rating information with the commissioner, and §2251.003 puts personal automobile insurance inside that requirement, which is why an agent can explain a factor and cannot change one.

A Texas driver who wants a rating factor explained has somewhere to go. The Texas Department of Insurance takes consumer questions at tdi.texas.gov, including questions about how a filed factor was applied to a policy.

Aulona Insurance Group places the coverage this question is about: Low-Cost Auto Insurance in Texas.

What does not change a Texas auto rate

Asking does not change a Texas auto rate, and neither does loyalty on its own. A filed rate applies to every risk that matches its rules, and the person on the phone applies it rather than setting it.

Five familiar ideas do nothing to the rate by themselves:

• Paying the bill on time, which prevents cancellation and is not a rating factor
• Years spent with an agency, as distinct from years with an insurer
• Color of the vehicle, which appears in no filing
• A clean year while a surcharged item is still inside its filed period
• Adding a tracking device the insurer has not filed a program for

Time is the honest answer here. A surcharged item counts until its period ends, and no agent can end it early.

What to have ready before you ask an agent

Bring the declarations page and the dates. The current policy names the coverages, the limits and the drivers an insurer already accepted, which is why it is the document to have in front of you.

Have these in front of you:

• The declarations page for every vehicle on the policy
• The seventeen-digit VIN, year, make, model and trim for each vehicle
• Every licensed driver in the household, with license numbers and dates of birth
• Dates for every ticket, at-fault accident and claim in recent years
• The garaging address, annual mileage, and how each vehicle is used

Accuracy beats optimism here. A premium built on a wrong mileage figure or a missing driver gets rebuilt later, usually at renewal or at a claim.

Luka Cenaj goes through the record and the vehicles on a recorded call before Aulona Insurance Group takes a Texas auto risk to an insurer.