Texas car insurance rates going up next year

HOUSTON It does not sound like much of an increase, 2 to 3 percent, but we spoke with several drivers who have liability coverage, and they say any increase right now is a bad idea.

About half of insured drivers in Texas carry only liability coverage, the least expensive option available to them. Starting in January, that low cost coverage will go up and that means Michael Pennywell will be paying more.

"There is no money; it's real hard right now. You cannot even get a job, it's the holiday season and this is not even the time for it," said Pennywell.

The rate hike is not huge, just two or three percent. For Pennywell his $45 a month insurance bill will go up by just over one dollar a month. Pennywell says that would be fine if it was only car insurance that will cost more.

"Everything is going up in Houston, groceries, the meat, and they are steadying, trying, it's not like we are getting a raise," said Pennywell.

The rate hike was mandated by the state legislature back in 2007 because coverage limits were not keeping pace with rising medical costs.

For Kenneth Berkley, paying more for car insurance, even a little, will be a problem.

"I got to borrow money to pay my light bill and rent and all this, but other than that, hey, I only make $866 a month and that don't go far," said Berkley.

The liability insurance increase will affect more than 7 million Texans, who will now get more coverage as a result.

"For minor accidents this is probably going to take care of it, and that is the vast majority of accidents will fall within these minimum liability limits," said Scott West of Pathfinder Insurance.

So how much more coverage do you get?

The current law says that a driver must have minimum liability limits of $25,000 for each injured person, $50,000 per accident and $25,000 for property damage per accident.

On January 1, the limits become $30,000 for each injured person, $60,000 per accident and $25,000 for property damage.

Drivers will see the increase in premiums not on January 1, but when they renew their coverage. So if you renew in April, that's when you will see the increase.

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