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State Auto Insurance Rates Rise due to Weather

4 years 3 weeks 2 days ago Monday, July 10 2017 Jul 10, 2017 July 10, 2017 5:36 PM July 10, 2017 in News

MCALLEN – Principle Insurance agent Aziz Showery said auto insurance rates in the state of Texas continue to rise due to extreme weather around the state.

Paul Vazaldua said the Rio Grande Valley is his home. He was born and raised in McAllen. He’s a small business owner who works hard to keep his business profitable.

A month ago he made a bet with one of his employees, and as a result of that bet he began driving for Lyft.

“The vehicle is what gets us mobile and allows us to pick up folks in the community that need rides. My insurance rates have been going up, and my driving record has been staying pretty clean, so it just makes me wonder what’s going on with that,” Vazaldua said.

Vazaldua explained thanks to Lyft his car now provides a second income. He’s worried the increased rates will continue because he’s driving more miles in his car.

“A rise in rates affects everybody. When you touch somebody’s pocketbook, everybody seems to feel it. An increase that is out of the ordinary really raises a red flag,” Vazaldua told CHANNEL 5 NEWS.

Vazaldua said the continued rise in auto rates is causing him and his family to shop around for insurance. He wants to know why rates are rising and how they can save money. 

We headed to an insurance agency for answers. Agent producer Florinda Gamboa explained the increase in hail storms throughout Texas over the past several years are a big reason for the hike in rates.

“The cost of claims have went up enormously. In 2014 in Texas, there were 135,927 claims. In ‘16 there were 378,652 claims on just autos alone for hail storms,” Gamboa said.  

The principle agent and owner of the agency is Aziz Showery. He told CHANNEL 5 NEWS the vast majority of insurance companies work statewide. Meaning the reserve a company stores to pay claims is shared throughout the state. Due to the rise in severe weather, companies reserve funds are depleted.

“Insurance companies need premiums in order to pay claims. And if the money that they have in reserve or held in reserve, that the State of Texas requires them to have by the Department of Insurance falls below that limit, then they have no other recourse but to raise premiums in order to build those reserves up,” Showery said.

Showery also explained the rising cost in auto parts, as well medical bills, are also causing rates to rise. To save money he recommends people shop around for rates every six months, bundle their home and auto insurance, raise your deductibles and ask for low mileage discounts.

Showery pointed out home insurance rates throughout the state are also on the rise due to the rise in hail storms as well.

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