Texas auto claims inflation, September 2026: repair costs up, premiums down

The squeeze in one chart

In September 2026 the U.S. consumer price index for motor vehicle maintenance and repair was 5.8% (adverse for insurers) higher than a year earlier [1]. The index for motor vehicle insurance was -5.0% lower over the same period [1]. Medical care prices rose 1.5% [1].

Which costs are moving

Not every part of a claim is inflating at the same rate. Labor-heavy work is rising fastest. Parts are flat.

• Maintenance and servicing rose 7.8% (adverse for insurers) and body work rose 6.0% (adverse for insurers) in the year to September [1].
• Motor vehicle parts and equipment rose 0.8% (favorable for insurers) and tires 0.2% (favorable for insurers) [1]. Parts inflation has cooled sharply since 2022.
• Used vehicle prices fell 1.5% (favorable for insurers) in the year to September [1]. Lower used values help total loss severity, which partly offsets higher repair bills.
• Hospital services rose 5.4% (adverse for insurers) while physicians' services rose 2.1% [1].
• The producer price index for offices of lawyers rose 7.4% (adverse for insurers) in the year to September [2]. Legal cost is a direct input to bodily injury and liability claims where an attorney is involved.

For physical damage, this mix means repairable claims are getting more expensive faster than total losses. For bodily injury, hospital and legal costs are running well ahead of headline medical inflation.

Texas medical costs run hotter than the national figure

BLS publishes local CPI for Dallas-Fort Worth and Houston every other month. The two metros tell different stories.

Medical care prices in Dallas-Fort Worth rose 4.4% (adverse for insurers) in the year to September 2026, against 1.5% for the U.S. [1]. In Houston the latest comparable reading is August 2026, when medical care rose 1.6% [1]. Overall prices rose 3.0% in Dallas-Fort Worth (September) and 1.3% in Houston (August) [1].

For carriers with heavy North Texas exposure, national medical CPI understates the pressure on personal injury protection, medical payments and bodily injury severity.

Frequency is not the problem

Claim frequency is moving the right way. Texas recorded 3,769 traffic deaths in 2025, down 9.38% from 4,159 in 2024, while vehicle miles traveled rose 1.79% to 314.0 billion [3]. The fatality rate fell to 1.20 deaths per 100 million miles, from 1.35 [3]. TxDOT counted 244,534 people injured in 2025 crashes [4].

So the cost pressure in Texas auto is a severity story, not a frequency story.

What this means for underwriting and claims

Underwriting. Rate adequacy reviews built on 2025 severity trends will understate repair and legal costs in 2027 policy periods. Book segments with higher repairable claim shares, newer vehicles and North Texas garaging carry more of this pressure.

Claims. Labor rates, ADAS calibration lines and storage charges are where severity is building. These are the line items to check on every estimate. On injury claims, attorney involvement and hospital billing are the drivers to watch. Claim costs are also on the regulatory agenda: in August the Governor directed TDI to act on home and auto affordability, and on 2 September TDI issued guidance on pricing that uses non-risk factors [5].

What we are watching next

• November CPI, due on 10 December 2026. BLS did not collect October 2025 prices during the federal shutdown, so most October 2026 indexes have no 12-month change. November restores it for most series.
• The motor vehicle insurance index also has no November 2025 value, so its next 12-month change is for December 2026, due on 13 January 2027.
• Dallas-Fort Worth CPI for November, the next local reading, published with the national release.