Auto Insurance In Texas: How Much Does It Cost?

Texas has some of the highest car insurance rates in the US, with an average annual cost of $1,584, which is 4% more than the national average. The state also has one of the highest numbers of uninsured drivers in the country, with approximately 12% of drivers lacking insurance in 2023. Texas law mandates that all drivers must 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. However, the cost of car insurance in Texas can vary depending on factors such as the driver's age, location, driving history, and coverage options.

Texas auto insurance laws

Texas has a Consumer Bill of Rights for auto insurance, which insurance companies are required to give customers when they purchase or renew a policy.

Texas law requires drivers to show proof that they can pay for any accidents they cause. Most drivers do this by purchasing auto liability insurance. It is illegal to drive without insurance in Texas, and drivers must carry proof of insurance in their vehicles at all times. This can be in the form of an insurance card or digital proof of insurance. Failure to do so can result in fines, license suspension, and vehicle impoundment.

The minimum liability coverage, known as "30/60/25" coverage, includes:

• $30,000 per person for bodily injury
• $60,000 per accident for bodily injury
• $25,000 per accident for property damage

However, these minimums may not be enough in the event of a serious accident, and drivers are encouraged to purchase additional coverage.

Texas is not a no-fault insurance state, meaning the driver at fault in an accident is responsible for paying for the damage caused. Due to the high number of uninsured drivers in Texas, it is recommended that drivers consider additional coverages such as Personal Injury Protection (PIP) and Uninsured Motorist Coverage.

Texas also has specific laws regarding electronic proof of insurance, vehicle registration, and teen driving, which new residents and drivers should be aware of.

Average cost of auto insurance in Texas

The average cost of auto insurance in Texas is $58 per month for a minimum coverage policy and $153 per month for a full-coverage policy. The average cost of auto insurance in Texas is 10% cheaper than the national average for minimum coverage and 7% cheaper than the national average for full coverage. Texas Farm Bureau offers the cheapest rate for liability-only coverage at $33 per month and the cheapest rate for full coverage at $86 per month. The cost of car insurance in Texas has gone up by 49% since 2019, with rate increases peaking in 2022 and 2023.

Minimum auto insurance requirements in Texas

Texas has some of the highest numbers of uninsured drivers in the United States, with approximately 12% of its drivers lacking car insurance in 2023. Driving without insurance in Texas can result in a fine of up to $1,000.

Texas law mandates that all drivers must carry at least the minimum liability coverage, which includes:

• $30,000 per person for bodily injury
• $60,000 per accident for bodily injury
• $25,000 per accident for property damage

These minimum requirements are often referred to as 30/60/25 coverage. The average annual cost for minimum coverage car insurance in Texas is $561, or $47 per month.

The two types of liability coverage that your insurance policy must include are:

• Property damage: This safeguards your assets if you are found legally responsible for a covered accident. It covers certain damage you may cause to the property or vehicle of another party.
• Bodily injury: This safeguards your assets if you’re found legally responsible for a covered accident, including certain expenses associated with bodily harm sustained by the other parties.

Liability coverage also provides for your legal defence expenses if you are sued as a result of a covered accident.

Texas is a fault state, meaning insurance companies pay out according to each party's degree of fault in an incident. In fault states, the driver at fault is responsible for covering the damages. In no-fault states, each person's insurance coverage pays for their own damages, regardless of who caused the accident.

Discounts on auto insurance in Texas

Texas car insurance costs are higher than the national average, with the average driver paying $2,445 for full coverage and $695 for minimum coverage. However, there are several ways to get discounts on auto insurance in Texas.

Firstly, it's important to shop around and compare prices, as rates can vary significantly between companies. For example, Allstate, one of the most affordable options, offers an average annual Texas sample premium of $544. Additionally, many companies offer discounts for specific groups, such as students or safe drivers. For instance, State Farm offers discounts for good students and safe drivers, while Liberty Mutual offers a discount for those with a violation-free driving history.

Another way to save on auto insurance in Texas is to take advantage of bundling options. Several companies, such as Allstate, State Farm, and Farmers, offer discounts when you bundle your auto insurance with other types of insurance, such as homeowners or renters insurance. You may also be able to save money by paying your premiums in full rather than in monthly instalments.

Furthermore, some companies offer low-mileage discounts for those who work from home or only drive for pleasure. This can reduce your chances of getting into an accident and may result in lower insurance costs. Additionally, having multiple cars or policies with the same company can often lead to a discount.

Finally, adding safety and anti-theft features to your car can result in discounts. These features make your vehicle less likely to be stolen or damaged, reducing the risk for both you and the insurance company.

Comprehensive auto insurance in Texas

The cost of comprehensive coverage varies depending on personal factors such as age, gender, marital status, driving record, vehicle type, and location within the state. For example, the average cost of comprehensive coverage for TGS Insurance customers in Texas is $183.57 per year, but this can range from under $150 to over $250.

Comprehensive insurance is worth considering if you live in an area with a high crime rate or an area susceptible to natural disasters. It is also a good idea if you cannot afford to repair or replace your vehicle in the event of damage or theft. Lenders may also require comprehensive coverage if you are leasing or financing your car.

To determine if you need comprehensive coverage and how much you need, consider your vehicle's worth, your risk susceptibility, and your ability to cover potential costs without insurance. Generally, if your annual premium exceeds 25% of your vehicle's current value, you may not need comprehensive coverage.

Frequently asked questions