Jane Dotson
Texas has one of the highest numbers of uninsured drivers in the US, with around 12% of its drivers lacking insurance in 2023. Texas law requires drivers to show proof of their ability to pay for any accidents they cause, and most drivers do this by purchasing auto liability insurance. This insurance covers the costs associated with injuries, death, or property damage caused by the driver. Texas has a Consumer Bill of Rights for auto insurance, which insurance companies are required to provide when a customer buys or renews a policy.
| Characteristics | Values |
|---|---|
| Required Insurance | Liability insurance |
| Minimum Liability Coverage | $30,000 per person for bodily injury, $60,000 per accident for bodily injury, and $25,000 per accident for property damage |
| Average Cost of Car Insurance | $1,584 per year |
| Cheapest Car Insurance Provider | GEICO |
| Most Expensive City for Car Insurance | Houston, Texas |
| Cheapest City for Car Insurance | Troy, Texas |
What You'll Learn
Minimum auto insurance requirements in Texas
Texas drivers must adhere to the state's minimum auto insurance requirements. These include $30,000 for bodily injury liability per person and $60,000 per accident, as well as $25,000 for property damage liability per accident. This is often referred to as 30/60/25 coverage and is the minimum required by Texas law.
Bodily injury liability coverage applies to medical bills and compensation for lost income for people outside the policyholder's family who are injured in a car accident where the policyholder is found liable. It can also help with legal fees if the injured party sues. Property damage coverage pays the actual cash value for the replacement or repair of another vehicle and the replacement or repair of stationary objects, such as fences.
The average cost of meeting Texas's minimum auto insurance requirements with 30/60/25 coverage is between $526 and $561 per year, or between $44 and $47 per month. However, rates will vary depending on factors such as the driver's characteristics, vehicle characteristics, coverage options, and location. While this coverage meets the state's minimum requirements, it might not be enough to fully cover the costs of an accident, leaving the policyholder responsible for any balance.
In addition to the minimum auto insurance requirements, Texas drivers must also carry proof of this coverage at all times. This proof must be shown at the request of any law enforcement official, such as during a traffic stop or after an accident. Texas drivers have been allowed to show digital proof of insurance via their mobile devices during traffic stops since 2013.
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Liability insurance
The minimum liability coverage in Texas is $30,000 in liability coverage for each injured person, up to a total of $60,000 per accident, and $25,000 for property damage per accident. This basic coverage is often referred to as 30/60/25 coverage. However, it is recommended that drivers consider purchasing more than the minimum limits to protect themselves financially in the event of an accident, as they may be sued for the difference if the minimum coverage is insufficient to cover all costs.
The average cost of minimum liability insurance in Texas is $57 per month or $683 per year, which is close to the national average. Driving without liability insurance in Texas can result in fines of up to $1,100 and driver's license suspension.
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Collision and comprehensive auto insurance
Collision Coverage
Collision coverage pays to repair or replace your vehicle after an accident, regardless of who is at fault. This includes accidents involving another vehicle, collisions with objects such as a tree or guardrail, and single-vehicle accidents such as rolling your car. Collision insurance also covers damage caused by road hazards, such as potholes. When purchasing collision coverage, you will typically choose a deductible, which is the amount you must pay out of pocket before the insurance company covers the rest. Deductibles for collision coverage typically range from $100 to $500 or between $500 and $1,500, with $500 being the most common. While collision coverage is not mandatory, it is highly recommended, especially if you cannot afford to fix or replace your vehicle in the event of a total loss.
Comprehensive Coverage
Comprehensive coverage, also known as "other than collision" coverage, protects you financially if your vehicle is stolen or damaged by something other than a collision. This includes fire, flood, vandalism, theft, and weather damage such as hail. Like collision coverage, comprehensive coverage typically has a deductible that you must pay before the insurance company covers the rest. Comprehensive coverage does not include damage caused by collisions with animals or damage from fallen objects.
Choosing Collision and Comprehensive Coverage
When deciding whether to purchase collision and comprehensive coverage, consider your financial situation and the value of your vehicle. If you cannot afford to repair or replace your vehicle in the event of an accident or theft, this coverage can provide valuable protection. Additionally, if you are leasing or financing your vehicle, your lender may require you to carry both types of coverage. While collision and comprehensive coverage will increase your insurance premiums, they can provide peace of mind and help you avoid costly repairs or replacement costs.
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How to save on auto insurance in Texas
Auto insurance in Texas is mandatory for drivers to protect themselves financially in case of an accident. While insurance is a necessity, there are ways to save money on your auto insurance. Here are some tips to help you get the coverage you need at a more affordable price.
Shop Around for the Best Policy
As with any major purchase, it's essential to shop around to find the auto insurance policy that suits your needs and budget. Compare prices and policies from different companies to ensure you get the best deal. You can use online tools like HelpInsure.com or the Office of Public Insurance Counsel's website to get sample rates and compare policies.
Ask About Discounts
Insurance companies often offer discounts that can lower your premium. Common discounts include those for safe drivers, having safety features like airbags and anti-theft devices in your car, taking defensive driving courses, maintaining a good driving record, having multiple policies with the same company, and more. Be sure to ask your insurance company about any available discounts and how to qualify for them.
Improve Your Driving and Credit Scores
Your driving habits and credit score can impact your insurance rates. Insurance companies often reward safe drivers with lower premiums, so maintaining a good driving record is essential. Additionally, improving your credit score can also help lower your insurance costs, as it is one of the factors considered when setting insurance rates.
Choose Your Deductibles Wisely
A deductible is the amount you pay towards a claim before the insurance company covers the rest. While choosing a higher deductible can lower your premium, remember that it also means you'll have to pay more out of pocket if you need to make a claim. Consider your financial situation and choose a deductible that strikes a balance between a lower premium and a manageable out-of-pocket expense.
Review Your Coverage
Review the various coverages included in your policy and consider if any can be adjusted. For example, if you have an old car that's been paid off, you may want to cancel any unnecessary coverage, such as gap coverage. Additionally, if you're working from home and driving less, you may be eligible for a pay-per-mile policy, which can save you money.
By following these tips, you can save money on your auto insurance in Texas while still ensuring you have the coverage you need to protect yourself financially in the event of an accident.
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Auto insurance for young drivers
- Shop around: Compare rates from multiple companies to find the most affordable option.
- Stay on a parent's policy: Adding a young driver to an existing policy is usually cheaper than purchasing a separate policy.
- Look for discounts: Many companies offer discounts for young drivers who maintain good grades, complete driver's education courses, or demonstrate safe driving habits.
- Choose a higher deductible: Opting for a higher deductible can lower your premium, but keep in mind that you will have to pay more out of pocket if you need to file a claim.
- Consider the type of car: Insuring an inexpensive car or one with a good safety rating can help reduce costs.
- Use a telematics app: Allowing your insurance company to track your young driver's habits with a phone app or device can often lead to a discount if they drive safely.
- Keep the car at home: If your young driver is away at college and doesn't take a car, you may be eligible for a discount.
It's important to note that Texas law requires drivers to show proof of their ability to pay for any accidents they cause, which is usually done through liability insurance. The minimum coverage required in Texas is $30,000 in liability coverage for each injured person, up to a total of $60,000 per accident, and $25,000 for property damage per accident, known as 30/60/25 coverage.
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Frequently asked questions
Texas law mandates that all drivers carry at least the minimum liability coverage, which includes $30,000 per person for bodily injury, $60,000 per accident for bodily injury, and $25,000 per accident for property damage. This basic coverage is often referred to as 30/60/25.
In addition to liability insurance, you can also purchase collision insurance and comprehensive insurance. Collision insurance pays for damage to your car, while comprehensive insurance covers damage from fire, hail, vandalism, or theft. You can also purchase uninsured or underinsured motorist insurance, medical payments insurance, and personal injury protection.
You can shop around for auto insurance policies from different providers and compare prices and coverage options. Once you've found a policy that meets your needs and budget, you can purchase it directly from the insurance company or through an agent.
