How Much is Texas Car Insurance?
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Texas is known for its warm weather, lively music, and delicious BBQ. If you want to become a Texan and enjoy everything the state has to offer, you’ll need to purchase adequate car insurance first—that is, if you want to be on the road. All Texas drivers are legally required to have a certain amount of car insurance coverage.
So how much does this coverage cost? Just like everything in Texas, the car insurance premiums are a little bigger in the Lone Star State.
In this article, you’ll learn how much Texas car insurance costs and how you can score the best deal on your premium. You’ll also learn some of the reasons behind Texas’ high rates.
Why Do You Need Car Insurance in Texas?
In order to legally drive the roads of Texas, you need adequate car insurance coverage.
Why is this?
Well, driving is a big responsibility. If you cause a car accident, you’re liable for any resulting damage, including property damage and bodily injury to another person.
If you don’t have car insurance, you’ll have to pay these expenses out of pocket. Having adequate car insurance shows that you’re prepared to deal with these financial consequences. For this reason, you’ll need to present proof of car insurance any time you:
Get your car inspected
Get a Texas driver’s license
Get pulled over in your vehicle by law enforcement officers
Every state has specific laws about how much car insurance coverage you need. In Texas, all drivers are required to have the following liability policies:
Bodily Injury Liability – $30,000 per person and $60,000 per accident
Property Damage Liability – $25,000 per accident
If you cause a car accident, these liability policies pay for the resulting damages, including other drivers’ medical bills, lost wages, funeral expenses, and property damage reimbursements. These policies also cover your legal representation, if you require any.
However, neither of these policies pay for your medical bills, vehicle damage, or lost wages. If you want personal protection, you’ll need to purchase additional car insurance policies.
Texas Mandatory Minimums for Optional Policies
Texas also has mandatory minimums for the following optional policies:
Personal Injury Protection (PIP) – $2,500 per accident
Uninsured Motorist Bodily Injury – $30,000 per person and $60,000 per accident
Uninsured Motorist Property Damage – $25,000 per accident with a $250 deductible
You can reject these forms of coverage entirely if you want to. However, purchasing them may be in your best interest. For example, PIP insurance covers your medical bills and lost wages if you get into an accident, regardless of who was at fault. This form of protection can give you great peace of mind.
Likewise, Uninsured Motorist policies protect you financially if you get into an accident with an uninsured driver. Since these drivers don’t have an insurance provider that can reimburse you, these policies enable you to proactively protect yourself.
How Much Insurance Should I Purchase in Texas?
If you want to spend as little as possible on your car insurance, simply purchase the bare minimum of required coverage. If you’d prefer fuller protection, buying some optional policies can insulate yourself financially from a bad auto accident.
How Much is Car Insurance in Texas?
Now that you understand what the car insurance requirements are in Texas, let’s take a look at their costs.
In Texas, the average annual car insurance premium is $1,810, which is about $150 a month. For reference, the national annual average car insurance premium is $1,426. Fortunately, you may be eligible for a lower premium than the Texas average.
Your premium is based on your:
Texas zip code
Car insurance provider
By maintaining a safe driving record, choosing an affordable car, and shopping around for the best car insurance rates, you can set yourself up for a lower car insurance premium.
Average Texas Car Insurance Cost By Coverage Amount
The amount of coverage you purchase directly impacts your car insurance premium.
Just take a look at the average annual Texas car insurance premiums for these two different levels of coverage:
Minimum Coverage – $538
Full Coverage – $1,823
As you can see, your chosen auto insurance coverage amount makes a big difference in the annual cost.
Average Texas Car Insurance Cost By City
Similarly, where you live in Texas directly impacts your car insurance costs. That’s because each city carries a unique level of risk based on its:
Residents of “riskier” cities usually file more car insurance claims. Thus, the riskier your zip code is, the more your insurance premium will be.
Car Insurance Rates in Austin Texas and Other Cities
Here are the average annual car insurance premiums in a few of Texas’ big cities:
Austin – $1,821
Dallas – $2,202
Houston – $2,158
San Antonio – $1,914
Fort Worth – $1,858
Why is Texas Car Insurance So Expensive?
As you review these rates, you may be wondering, “why is Texas car insurance so expensive?”
Well, there are many contributing factors to Texas’ high premiums. Car insurance companies charge more in Texas to insulate themselves against these Texas-specific risks:
#1 High Population Density
After California, Texas is the most populated state in the country. And Texas has plenty of densely populated cities.
Highly-populated areas have more drivers on the road and more traffic. As a result, these areas are more prone to car accidents. In fact, Texas had the most fatal car accidents in the country in 2017. Cities, in general, also have higher rates of vandalism and car theft.
Together, these risk factors result in more car insurance claims. As a result, car insurers raise their Texas rates in response.
#2 High Speed Limits
Another reason why Texas has so many car accidents is its high speed limits.
While most highways in the United States have a speed limit of 65 miles per hour, Texas is home to the fastest highway in the nation. This highway has a speed limit of 85 miles per hour!
Driving fast may be fun, but it’s also dangerous. Higher speed limits are correlated with a higher frequency of car accidents and worse accidents at that. Due to this risk factor, Texas car insurance providers raise their premiums.
#3 Many Uninsured Drivers on the Road
Despite the steep penalties for driving uninsured, many people still choose to forgo car insurance—14.1% of Texans to be exact.
With so many uninsured drivers on the road, car insurance companies raise their premiums in response.
#4 High Frequency of Natural Disasters
Texas is the number one state for natural disasters. Texas experiences many:
Natural disasters can damage your car and cause accidents. Thus, Texas car insurance companies raise their premiums in response.
#5 High Minimum Car Insurance Coverage Requirements
Lastly, car insurance rates are relatively high in Texas because the state has higher required coverage minimums.
Many other states only require drivers to have Bodily Injury Liability Insurance for $25,000 per person and $50,000 per accident. In Texas, these minimums increase to $30,000 per person and $60,000 per accident.
This increased coverage is costlier, and therefore, it results in higher Texas car insurance premiums.
How to Get the Cheapest Texas Car Insurance Rates
Despite these Texas-specific risk factors, you don’t have to settle for expensive Texas car insurance. You can find an insurance policy that meets your coverage needs and your budget.
Here are some tips to score a low car insurance rate in Texas:
Choose your coverage strategically – While you must purchase the required liability policies, the rest of your coverage is up to you. Choose your policies based on your personal needs. For instance, if your car is older or worth less than $3,000, you may choose to forgo comprehensive coverage and collision coverage.
Increase your deductible – Your car insurance deductible is the amount you agree to pay out of pocket before your car insurance coverage kicks in. The higher your deductible, the lower your car insurance premium will be. Just keep in mind that you’ll have to pay more out of pocket when you get into an auto accident.
Take full advantage of relevant discounts – There are tons of car insurance discounts out there, like good student discounts, good driver discounts, and low mileage discounts. Ask each of your potential car insurance providers about their discounts and see which ones you qualify for. You could end up saving a ton of money from discounts alone.
Shop around – Since every car insurance provider will quote you a different rate, it pays to do your research. You can save a ton of money by comparing rates online. By choosing the insurer that offers you the best deal, you’ll feel confident in your choice and your wallet will thank you later.
Online Auto Insurance: Find the Top Rated Car Insurance in Texas
At OAI, you can compare auto insurance quotes online for free. In turn, you’ll discover which provider is right for you. By choosing the right car insurer, you can save a ton of money over time.
So what are you waiting for? Find your cheap car insurance today.
Texas Department of Insurance. Automobile insurance guide. https://www.tdi.texas.gov/pubs/consumer/cb020.html
Insurance Institute for Highway Safety (IIHS). Fatality Facts 2018: State by state. https://www.iihs.org/topics/fatality-statistics/detail/state-by-state
Governors Highway Safety Association. State Laws by Issue. https://www.ghsa.org/state-laws/issues/speeding%20and%20aggressive%20driving
Insurance Information Institute. Facts + Statistics: Uninsured motorists. https://www.iii.org/fact-statistic/facts-statistics-uninsured-motorists
NASA. Natural and Manmade Hazards in the State of Texas. https://nisar.jpl.nasa.gov/files/nisar/NISAR_Applications_Hazards_Texas.pdf