Monday, July 25, 2005

Ready for Your Car Insurance to Go Up?

In order to give minimal property tax reductions to homeowners and help reelect Governor Rick Perry, House Bill 3 will raise the sales tax and add new taxes to a host of services. According to recent proposals, these services will include (among others) connecting to the Internet (so much for closing the digital divide) and car repair.

This is what will be taxed according to the conference report on House Bill 3:

"Motor vehicle repair services" means the repair, remodeling,
maintenance, or restoration of a motor vehicle, including testing
or diagnostic services, body repair and painting, engine repair,
transmission repair, exhaust system repair, brake repair, and air
conditioning repair.
Of course, it's possible that insurance companies eager to do their part for public education and homeowners will absorb the increased costs of repairing vehicles rather than pass it on to customers as increased rates.

Possible...BUT NOT LIKELY.

According to insurance watchdog, Texas Watch, insurance companies overcharged Texas policyholders $4 billion in 2004. Texas Watch calculated that for Texas drivers the average overcharge per vehicle insured worked out to $205.26. Oh, and btw, in 2002 Texas had some of the highest insurance rates in the nation for homeowners. Wonder how much those have gone down since then...

The more than $700,000 the insurance industry spent to elect a friendly Lege in 2002 sure paid off, didn't it?