High Car Insurance Premiums Cause Financial Strain for Some Low- and Moderate-Income Harris County Drivers

AUSTIN, Texas—Insights from a focus group in Harris County reveal how low- and moderate-income drivers are navigating an increasingly expensive car insurance market. Participants highlighted three recurring themes: the challenges of affording coverage, decisions to go uninsured despite the risks, and concerns over unfair pricing practices.

The study was conducted by Texas Appleseed and the United Way of Greater Houston. The new report, The Car Insurance Tightrope in Texas: Stories from Harris County on Affordability & Fair Pricing, details data and stories that the participants shared.

Despite Texas’ legal requirement to maintain a basic level of liability insurance, surging costs can lead drivers to forgo coverage to make ends meet. A recent Texas Appleseed study also found that higher auto insurance costs are associated with more ticketing for driving without insurance in Harris County. 

“We shouldn’t require people who are already struggling financially to pay an exorbitant monthly premium based on factors they can’t control,” said Ann Baddour, director of the Fair Financial Services Project at Texas Appleseed. “People want to drive with insurance, but for many, there’s simply not a reasonable option on the market.”

Approximately 12% of Texas car owners are uninsured, and in Harris County, 14.44% of registered vehicles are uninsured.

Three major themes emerged and are included in the new report:
 

Theme 1: Survey Participants Struggled to Afford Car Insurance

Despite differing priorities — some purchased only the minimum coverage legally required, while others sought out specific benefits — most participants agreed that the cost of insurance is too high and affordable options are not generally available. 

Of the participants who provided an estimate of their monthly household expenses, those with both car insurance and a car payment pay five times the target amount for affordable coverage. Those participants reported spending, on average, approximately 13% of their monthly household expenses on car payments and 10% of their monthly household expenses on car insurance. Generally, 2% of a monthly budget is the target amount for affordable insurance.

“It’s a big part of a lot of our budgets,” one participant shared. “You have your car payment at $600 or $700…and you have insurance, another 300 dollars a month. It is almost $1,000 just for a car.”

Theme 2: Participants See Benefits to Having Insurance, But Sometimes Went Without It

Participants generally acknowledged the benefits of car insurance and expressed a desire to drive legally, but 47% reported driving without insurance at some point. Almost all cited cost as the main factor preventing them from obtaining coverage. They also noted that the high cost doesn’t always seem worth the investment. 

One participant shared, “I cannot afford to pay $5K a year for something that may or may not provide protection.” Another wondered, “If you don’t have a new car, what is the point of paying? If you have a high deductible, then you have to pay a lot before you get any help."

Theme 3: Participants Believe Insurance Pricing Unfairly Penalizes Poverty

Participants did not feel that drivers should be penalized for things out of their control, and rated gender, credit score, age, marital status, zip code, and no-fault accidents as unfair factors for insurers to consider when determining rates. 

Participants were surprised to learn that rates can sometimes double if a person has a gap in insurance coverage. One participant responded to this information, “Basically they are criminalizing poverty, and they’re going after people that are poor, that are usually people of color. So, poverty is a proxy of race and discrimination.”

They agreed that at-fault accidents, tickets, and natural disasters are fair factors to consider.

A Vision for a Fair Market from Focus Group Participants

People believed that car insurance should be required to drive in Texas but that drivers should be financially incentivized to do the right thing. They desire an affordable option — potentially provided by the government, as one participant suggested — that is based on relevant factors. Another participant said price should be related to “Something that actually has to do with your driving, not just your zip code, or based on your income, or your gender or your race. Those are things you can’t control and they’re discriminatory.”

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About Texas Appleseed

As one of the most trusted resources for data-driven policy analysis and solutions, Texas Appleseed advocates at the state and local level for fair, just, and equitable laws. Our work has shaped hundreds of laws and positively affected millions of Texans by breaking down barriers through transformative policy solutions. Visit www.TexasAppleseed.org for more information.