Texas Auto Insurance: Unaffordable?

Can't Afford My Texas Auto Insurance

If you're struggling to afford your auto insurance in Texas, you're not alone. Many Texans face the same challenge due to rising costs and it can be a stressful situation. However, it's important to remember that driving without insurance is not an option as it can lead to legal and financial consequences. So, what can you do if you can't afford your Texas auto insurance?

Firstly, don't cancel your policy or drive uninsured. This can result in an insurance lapse, which will impact your future insurance costs and may even lead to your state requiring you to file an SR-22 form. Additionally, driving without insurance can result in having to pay out of pocket for any accidents you cause, suspension of your license, and repossession of your car if you have an auto loan or lease.

Instead, there are several options you can explore to make your auto insurance more affordable. Start by contacting your insurance company to discuss payment options and discounts. They may allow you to delay or combine payments, and they can inform you about any discounts you may be eligible for, such as good student discounts, bundling discounts, or safe driving discounts. You can also consider raising your deductible, which will lower your insurance costs, but ensure you can afford the larger deductible in case of a claim.

Another option is to change your coverage. If you have an older car, you may be able to drop comprehensive and collision coverage, which only pays out up to your car's market value minus your deductible. You can also consider pay-per-mile insurance, which is priced based on the number of miles you drive and can be cheaper if you don't drive frequently. Shopping around for a new insurance policy can also help you find more affordable rates, and some companies offer discounts for new customers.

Improving your credit score can also positively impact your insurance costs, as car insurance companies in Texas use credit-based insurance scores to determine rates. Finally, if you've tried all the above options and still can't reduce your bill, consider alternative transportation options such as public transportation, ridesharing, or carpooling until your budget allows for a monthly premium. Remember, it's important to stay insured and explore these options to find a more affordable solution.

Raise your deductible

Raising your deductible is a guaranteed way to lower your auto insurance costs. A deductible is the amount you pay out-of-pocket before your insurance coverage kicks in. Typically, you can choose a deductible of $250, $500, or $1000, but amounts can go as high as $2500.

Raising your deductible will lower your insurance premium, but it's important to ensure you have the financial means to cover the higher deductible in the event of a claim. You should only consider this option if you can afford the larger deductible and have enough money in the bank to absorb the higher costs.

If you're a consistently safe driver who hasn't filed a claim in the past, or you don't drive often, you might be more comfortable taking on a higher deductible. By increasing your deductible from $500 to $1000, you can save an average of $188 per year on comprehensive and collision coverage collectively.

Before making the switch to a higher deductible, assess your emergency fund and ensure you have sufficient savings to cover the higher deductible. It's important to note that raising your deductible means having to pay more each time you file a claim with your insurance company.

Change your coverage

Changing your coverage is a good option if you can't afford your car insurance bill. However, you should be aware that reducing your coverage means you will have to pay more out of pocket if you get into an accident or your car is vandalised or stolen.

If you drive an older car, you can likely drop comprehensive and collision coverage, as they will only pay out up to your car's market value, minus your deductible. For example, if your car is worth $1,000 and your deductible is $1,000, you won't receive a cash payout from a comprehensive or collision claim.

You can also reduce your coverage to the minimum state requirements. However, keep in mind that minimum coverage only includes liability insurance, which pays for others' medical bills and expenses after a crash you cause, up to your policy limits. You will be responsible for any damage to your car.

If you have an auto loan or lease, you will likely need to buy optional collision and comprehensive insurance to cover repairs to your vehicle.

You can also consider pay-per-mile insurance, which is priced by combining a monthly base rate and a mileage rate. This can be a cheaper option if you drive infrequently or use public transportation.

It's important to note that changing your coverage may not be the best option if you have a newer car or one with a loan or lease. In that case, you may want to consider other options, such as shopping for a new policy or raising your deductible.

Shop for a new policy

Shopping for a new auto insurance policy is a great way to save money on your insurance costs. Here are some tips to help you shop for a new policy in Texas:

• Compare quotes from multiple insurers: It is recommended to compare quotes from at least three different insurance companies at least once a year to ensure you are getting the best rate possible. You can use online tools and websites to get quotes from multiple insurers and compare them side by side.
• Look for discounts: Many insurance companies offer a range of discounts that can help lower your premium. Common discounts include low-mileage discounts, safe driving discounts, good student discounts, multi-policy discounts, and multi-vehicle discounts. Ask each insurer about the specific discounts they offer and whether you are eligible for any of them.
• Consider pay-per-mile insurance: If you don't drive frequently, you may benefit from pay-per-mile insurance, which charges you based on the number of miles you drive. This can be a more cost-effective option than a standard policy.
• Improve your credit score: In most states, including Texas, insurance companies use your credit score to calculate your insurance premium. Working on improving your credit score can help lower your insurance costs over time. You can improve your credit score by paying your bills on time and keeping your credit card balances low.
• Consider alternative insurance options: If you are unable to find affordable coverage through traditional insurance companies, you can explore alternative options such as the Texas Automobile Insurance Plan Association (TAIPA), which helps connect high-risk drivers with insurance companies. You can also consider self-insurance or purchasing a surety bond as proof of financial responsibility.

Contact your insurance company

If you can't afford your Texas auto insurance, it's important to contact your insurance company as soon as possible. They may allow you to delay an upcoming payment or combine it into future payments. Insurers typically offer a grace period for late payments, but this can vary depending on the state and company, so be sure to ask about this.

It's also worth checking with your insurance company about any discounts they offer. You could save money for a variety of reasons, such as having a student with good grades, bundling your car insurance with another policy, or signing up for automatic payments and paperless billing.

If you've missed a payment, your insurance company will contact you. You may be able to make a late payment, but this could come with a penalty or premium increase. If you miss the payment due date, your account could be turned over to a collections agency and your coverage may be cancelled.

So, if you're having trouble paying your Texas auto insurance, get in touch with your insurance company to discuss your options and see if they can offer any discounts or payment flexibility.

Use alternative transportation

If you're struggling to afford auto insurance in Texas, one option is to use alternative transportation methods. This could be a temporary solution until you have room in your budget for a monthly premium.

Many cities offer cost-effective public transportation, rideshare services, and carpooling. If you're able, you could also walk or ride a bike for shorter distances. These options can help you save money on both transportation and insurance costs.

If you have access to someone else's vehicle, consider getting a non-owner car insurance policy. This type of insurance is typically less expensive than a standard policy and will provide coverage if you need to drive occasionally. It will also help prevent an insurance lapse, which can increase your premium once you switch back to a standard policy.

Additionally, if you're a registered vehicle owner, remember that you can only cancel your insurance if you also cancel your vehicle registration and store your vehicle off public roadways.

By exploring these alternative transportation options, you can reduce your insurance costs while still having access to the transportation you need.

Frequently asked questions