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Thursday, 23 December 2010 17:35

Texas Insurance Rates to Rise in New Year to Pay for Increased 30/60 Liability Limits Featured

As people begin thinking ahead to 2011, one important change will be implemented for drivers with auto insurance. With the passage of increased liability limits in 2007, Texans will notice an increased insurance rate of two or three percent to cover the additional insurance protection in 2011.

While the two to three percent rate increase that is expected to come from the increased coverage limits is minimal, many consumers question the reason for the rising costs. According to CBS, the increase in auto insurance minimum requirements is meant to address rising medical costs associated with car accident claims. Rising medical costs, meaning the cost for post-accident medical care and treatment, have increased in recent years and, in 2007, the Texas Legislature took action in an effort to ensure that car accident victims have the proper insurance coverage.

CBS reported that approximately 7 million Texans will be affected by the coverage and rate increases. Approximately half of insured drivers opt for the least expensive insurance option, which is just liability coverage, not collision coverage.

Under the current minimum limits, a driver must have at least $25,000 in injury coverage, $50,000 in accident coverage and $25,000 in property damage coverage per accident. Now, the new minimum liability limits will increase to $30,000 for each injured person, $60,000 for each accident, while the property damage minimum limits will remain the same.

The new rate and coverage increase will not occur automatically on January 1; instead, the increase will be activated when the auto insurance policy is renewed in 2011

In Texas, insurers raise rates upon notifying regulators, but the Insurance Department can order a reduction and repayment of overcharges if it finds the rates are unjustified or excessive.

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