More Incentive to Stay Out of Texas’s High-Risk Pool

Painted Texas flagIt has always been a good idea to drive safely and avoid accidents in Texas, but now vehicle owners have a little extra incentive. In April 2012, the state commissioner of insurance issued an order saying that rates for the state’s high-risk insurance pool will rise by 24.1 percent overall.

Effective on July 1, the price of bodily injury liability issued through the state-run pool will increase by 31.9 percent, and property damage liability will increase by 20 percent. Once these changes take place, the average base rate for a policy through the program that provides only bare-bones liability coverages will be $578 (but they can range from just under $300 to nearly $2,500).

​What Is the High-Risk Pool?

Strict financial responsibility requirements in the Lone Star State require motorists to carry auto insurance to legally operate a motor vehicle, but having a blemished driving record can make it difficult to find a willing insurer. If residents can’t buy protection from a company on the voluntary market, they may be forced to enroll in the Texas Automobile Insurance Plan Association (TAIPA) to avoid driving while uninsured. Unfortunately for many residents, TAIPA is about to get more expensive.

To use TAIPA, residents must have been denied coverage by at least two companies on the voluntary market. Usually, people are only denied insurance because they are considered high-risk drivers, which is a title that usually comes from having a poor driving record. When someone files multiple claims or has a history of moving violations, insurers usually determine that the driver in question is at a greater risk of being involved in an accident or filing a claim in the future, and they will either charge more or deny coverage entirely.

The Helpful Advantages of TAIPA

Before current enrollees decide that they’re not going to pay an extra 24.1 percent for vehicle coverage and will simply drive without insurance, they should strongly consider the consequences. Financial responsibility laws are in place to protect resident motorists, and if drivers are involved in an accident while uninsured, they may still be responsible for other people’s damages. In a serious accident, this could lead to thousands of dollars’ worth of repairs and medical costs having to be covered by the uninsured driver.

In addition, driving without adequate protection can result in fines ranging from $175 to $1,000, a driver’s license suspension, and the impounding of the uninsured vehicle. Because of these consequences and the dangers of driving while uninsured, residents are urged to take advantage of statewide programs before breaking the law.

Residents who are affected by increasing TAIPA premiums are encouraged to take action to avoid costly coverage. Being assigned a policy through the assigned-risk plan is not a life sentence. Only drivers who are unable to find an insurer on the voluntary market need to enroll, and driving records can improve over time. Most offenses that appear on a person’s record only remain visible for three years. This means that making the effort to become a model driver could allow motorists to eventually shop for cheap auto insurance in Texas and get a reasonable rate.


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About Matthew Morisset
Matthew Morisset is a proud alumnus of the University of Redlands, where he obtained a degree in English Literature. Utilizing his passion for analysis and writing, Matthew looks for important trends in the auto insurance industry and their implications for consumers and the market as a whole.

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