The Ultimate Guide to Car Insurance in Texas: What You Need to Know
Texas is a big state, including the average premium for car insurance. Texas ranks eighth in the nation for car insurance costs, behind only New York, Florida, and a few other expensive states.
Texas drivers looking to save money should look at insurers such as USAA, Geico, and Nationwide. These are the three cheapest insurance companies for Texas drivers — and they’re the only ones with rates that average less than $2,000 per year.
Car Insurance in Texas
How much does car insurance cost in Texas?
According to NerdWallet, the average price of full-coverage car insurance in Texas is $2,398 annually. The average cost for minimum coverage in Texas is $774 a year or $65 per month.
These are only averages. The amount you pay for auto insurance in Texas depends on various factors, including your driving history and unique characteristics.
The average cost of auto insurance in Texas by company
The cost of car insurance in Texas is largely determined by the type and amount of coverage you purchase, as well as who you buy your policy from. Full and minimum coverage are the two most common types of car insurance.
NerdWallet compared the companies and found these findings:
State Farm offers the lowest cost Texas auto insurance, with an average of $396 per year.
Rates can be higher than this. You may pay up to $3,700 extra per year for full coverage car insurance, depending on which company you choose.
The table below shows average prices for minimum and full coverage for Texas companies.
The average cost of auto insurance in Texas by age
The age of a driver in Texas is a major factor in the cost of car insurance. The younger you are, the higher your car insurance costs will be.
Our analysis shows that the cost of auto insurance in Texas decreases by over half between ages 20 and 30. After 30, rates are usually the same, with only a small decrease in price after 60. In most cases, drivers see rates increase once they reach their 70s.
How Much Is Minimum Coverage Car Insurance in Texas?
In almost all states, drivers must have a minimum liability insurance policy to cover costs in the event of an accident where they are at fault. These minimum requirements in Texas are commonly referred to by the term 30/60/25.
What is 30/60/25 coverage?
The minimum limits of liability that are acceptable under Texas law, 30/60/25.
- Coverage of up to $30,000 per person for bodily injury
- Coverage of up to $60,000 per accident
- $25,000 property damage coverage per accident
- Bodily Injury Liability Coverage This coverage covers medical bills and lost income compensation of those outside your family who are injured in an accident for which you were found to be at fault. This coverage may also cover your legal costs if you are sued by another party.
- Property damage coverage pays the actual cash value of the replacement of or repairs to another vehicle, as well as the replacement of or repairs to stationary objects like fences.
- The Texas auto insurance policy will repair your car if it is damaged by non-collision incidents. These incidents include thefts, vandalism, glass breaks, animal contact, and fires.
- The collision coverage will repair your car if it is damaged by a collision with another object or vehicle (subject to the deductible).
- You are protected if the other party, who is at fault for the accident, does not have insurance or their insurance limits do not cover the damages caused.
Minimum insurance requirements for Texas
Texas auto insurance companies must also provide uninsured driver coverage, underinsured driver coverage and personal injury protection. These options can be refused in writing.
Be aware that state-mandated minimum coverages may need to be improved. You may need to purchase higher liability and optional coverages like uninsured or underinsured driver’s coverages to protect your assets.
Consider lender requirements
In Texas, drivers are required to have a minimum of liability insurance. However, suppose you own a car or lease it. In that case, your financial institution may require that you purchase collision and comprehensive coverage.
Your financial institution might also require that you purchase comprehensive collision coverage in this case. It ensures your vehicle will be covered if it is stolen or you total it due to an accident.
Consider your own individual needs
Each driver has different insurance needs. To find the most affordable Car Insurance in Texas, you must first decide which factors are important to you. If you own a newer vehicle, look for an insurance company that provides features such as new car replacement coverage and gap coverage if you are on loan.
If you have young drivers within your family, an insurer that offers student discounts may be the best option. You may prefer to manage your own insurance, so a company with a strong mobile app or online presence is a good choice.
How to find the best Car Insurance in Texas
The best auto insurance companies combine affordability with financial stability and a proven track record of excellent service. Money Geek already has quotes collected to help you choose the best insurer for your needs. But if you prefer to do your research, we will walk you through some of the basics.
Best Car Insurance in Texas for New Drivers With Cars
Money Geek research shows that Allstate offers the best value for insurers offering new or better cars. The ranking for this category was based on the cost and service quality provided to Texans who drove a 2022 model car and was limited to insurers offering new or better replacement cars. Our top recommendations are:
- Allstate has a Money Geek score (89) of 100 out of 100 (1,393 dollars per year).
- First: Money Geek score 81 out 100 ($2,009 annually)
Allstate is the best in its class, with low premiums and excellent customer service. As an optional coverage, drivers with newer cars may benefit from adding new or better replacement car coverage to their policy.
These coverages can help you purchase a new vehicle if your old one is totaled due to an accident covered by the policy. Your insurer will replace the car you own with a newer model and make. Better car replacement coverage will get you a one-model-year newer car.
A new car represents a significant investment, and drivers must take measures to protect it. A good insurance provider should offer this option. Allstate offers the best value for new car replacement insurance in Texas.
Foremost, however, adds $616 per year to the premium. Texas Farm Bureau is the most affordable in the state but does not offer this extra.
Texas customer service reviews
Money Geek summarized the customer service ratings for the top Texas providers using data from J.D. Power’s study on customer satisfaction and the NAIC index of customer complaints.
You can check the service history of an insurer by consulting these reputable, independent agencies. To learn more about a specific insurance company.
Compare quotes
Money Geek quotes are averages for drivers in Texas. However, your rates may differ since insurance companies consider many factors to determine premiums.
You should still get personalized quotes from three or more insurers to get an idea of the cost of your auto insurance.
Get the Texas coverage you need
Some insurers advertise coverages and discounts specific to certain states on their websites. You should visit the website of your favorite insurance company to learn about the discounts and coverages it offers. Confirm the web-advertised discounts and coverages by contacting your insurer.
Check Financial Stability Ratings
The financial strength rating of an insurer will give you a good idea of how well they can fulfill their financial obligations toward policyholders that file a claim.
You should check the financial strength rating for any insurer you are considering buying a policy from, regardless of whether it is a national or regional insurance company. Consider looking at a different insurer if it does not score well.
Conclusion:
Car insurance is a necessary and important part of driving in Texas. You can choose from a range of options to suit your budget, lifestyle and needs. Do your research to find the right option for you. You can reduce your premiums by researching discounts and determining what coverage you require.
