Auto insurance is a tool that protects both the insured and the public. Texas car owners purchase insurance to safeguard from financial losses in case of a car accident or theft of the vehicle. If your driving causes damage to others, state-mandated liability insurance pays for damages and injuries of the 3rd party.
The Texas Department of Insurance (TDI) is the regulatory body which approves auto insurance rates for insurance companies offering coverage in Texas. The average cost of car insurance in Texas is $115-$120 per month:
Every Texas driver must carry the state-required minimum of auto liability insurance coverage, to legally drive.
Here are the most common insurance companies offering car insurance in Texas:
|Top Car Insurance Providers in Texas|
|(in order of average customer sentiment)||Average Consumer Satisfaction Score|
|AAA / CSAA||3.9|
|Texas Farm Bureau Insurance||3.6|
|Alliance United / Kemper||2.7|
|Fred Loya Insurance||2.7|
|Note: Average consumer satisfaction rating is the average aggregate score from multi-user (non-employee) review platforms, such as: ConsumerAffairs, TrustPilot, WalletHub, Google, and others (based on availability).|
Speak with a Texas-licensed property insurance agent who can assess your car insurance needs and suggest the best insurance companies and plans to fit you.
One of the most important reasons you need auto insurance in Texas is because it is a legal requirement per the Texas Motor Vehicle Safety Responsibility Act. Texans are required to carry at least the liability coverage.
All drivers must always carry proof of the coverage, known as the Texas Liability Insurance Card, which must be presented upon request to any law enforcement officer. The proof of insurance card shows the:
Per rule §5.204 of the Texas Administrative Code, if you operate your vehicle without a valid insurance policy, you commit a misdemeanor punishable by a fine between $175 to $350 for the first offense. Subsequent offenses are punishable by a fine of $350 and $1,000, and your license is liable for suspension unless you can prove financial responsibility for two years. It is important to note that certain vehicles are exempted from having minimum liability coverage if they are:
Also, with the right type of auto insurance, you will be afforded protection even when you are not at fault in the accident. That way, you will not pay out of pocket for any liability incurred especially, if the at-fault driver is not insured or underinsured. This means as the victim in an accident, any injury or property damage you may have incurred will be covered by your auto insurance provider.
Texas is a large state, and it comes with a vast range of roads and different highways that Texans and the guests of the state commute on every day to get to their destinations. It is estimated that in 2022, there were over 23 million private and commercial vehicles (est. 23,385,535) registered in Texas.
In 2020, Texas Department of Transportation (TxDoT) reported over 474,549 crashes throughout the state, with a resultant 3,896 fatalities. Alcohol was determined as the main factor for the fatal crashes in Texas in every 4th driving fatality.
With 1 out of 5 vehicles in Texas uninsured or underinsured, almost 5 million vehicles (est. 4,671,707) present danger to the drivers on the road. Uninsured and underinsured coverage costs Texan nearly $900 million annually.
You may need auto insurance to supplement your health insurance policy by helping you pay for the medical expenses that your health insurance coverage may not cover, like dental work and medical treatment needed due to a car accident.
Auto insurance in Texas works as a safeguard for your vehicle and finances in case of accidents, thefts, or any other unforeseen incident. Auto insurance works to pay off the liability incurred from the damage to the vehicle, medical expenses, and injuries or damages to another driver.
To know how much auto insurance coverage you need, you must consider where you live. Texas requires you to have auto liability coverage evidencing the minimum requirement of 30/60/25 on your vehicle before you can drive it. It is recommended to get auto liability insurance above the Texas minimum liability coverage. This way, any cost above the minimum limit will not be paid out of pocket by the driver at fault. Typically, drivers will need to pay for additional costs above their insurable coverage limit.
You need to consider the value of your vehicle and whether you own the car outrightly or it is still being financed through a car loan. All this will help you determine how much auto insurance coverage you need. In addition to the auto liability coverage, you may need to purchase comprehensive, collision, medical payments, personal injury protection, uninsured and underinsured motorist coverage. Since there is no Texas minimum requirement for these types of auto insurance coverages, the choice is yours to decide the amount of coverage you can afford and need - to fit your requirements.
Like in almost all insurance coverage, you choose your deductible, which usually ranges between $100 and $1,000. The higher your deductible, the lower your premium, and vice versa. Therefore, it would be best to consider how much premium and deductible you can handle when deciding on your comprehensive auto coverage.
If your car is being financed through a loan or a lease, you may need to add gap insurance in addition to the auto insurance coverages mentioned above. Gap insurance is an inexpensive optional add-on to your auto insurance coverage, and it typically costs about $500-$1,000 as a one-time payment, or around $30-$100 per year. The amount of coverage an individual needs depends on the gap size, between the balance of the loan and the actual cash value of the vehicle. The larger the gap, the higher the cost of coverage. Once the loan is paid off, Gap insurance should be canceled.
If your car is damaged and needs to go in for repairs, you may need to have a backup plan to help you move around. Most times, you may need to rent a vehicle to help go places, and this is why you may need rental reimbursement coverage. When determining how much rental reimbursement coverage one requires in Texas, there is a need to decide if they can afford to cover the cost of a car rental while their car is being repaired after a covered loss. Usually, rental reimbursement coverage has daily limits and a maximum number of days it can be used. Typically, most coverages provide up to $25 per day for a maximum of 30 days until the car being repaired is deemed usable. If the rented vehicle costs more or you need to use it for a more extended period, you will be responsible for the out-of-pocket cost. It is important to note that rental reimbursement coverage does not require a deductible.
Even though you do not have a vehicle, you may need non-owner insurance coverage if you frequently drive another person's car. The amount of non-owner auto insurance coverage Texans need depends on their finances. However, Texans typically pay between $200 and $500 annually for non-owner auto insurance. When determining an insurance premium, the insurance provider looks at the driving history and driving frequency. Typically, individuals do not need to pay for deductibles when purchasing non-owner auto insurance.
In the end, whether you are thinking of how much auto insurance coverage you need for your private auto or commercial auto, the coverage should be enough to protect you from financial ruin if you were in an accident, regardless of who was at fault.
The typical Texas auto insurance coverage is:
Uninsured/Underinsured Motorist Property Damage: $100,000 per accident, with $250 deductible
Car Replacement Coverage: 10%-20%
Comprehensive coverage: $250 - $1,000, per occurrence
Collision coverage: $250 - $1,000, per occurrence
Bodily Injury (BI): $300,000, per person / $500,000 BI or death, per accident
Property Damage (PD): $100,000 per accident
Uninsured/Underinsured Motorist Bodily Injury: $300,000 per person / $500,000 per accident
Personal Injury Protection: $25,000 per person
Consult with a state-licensed insurance agent to know more about your options compared to your insurance needs. Also, you can speak to a commercial insurance agent licensed in Texas for more information regarding company-owned auto insurance coverage.
Texas is an at-fault state, which means anyone who causes a car accident will be responsible financially. It means an auto insurance provider will be liable to pay out the insurance claim for their policyholder’s damages or medical expenses.
Usually, when a car accident ends up causing bodily injury or property damage, the law enforcement arrives at the scene to write up a report. This police report is what insurance company adjusters use to determine who is at fault. It may take some time to determine who was at fault, especially in multi-vehicle collisions.
While determining who is at fault, your insurance provider can pay your claims to take care of the injury sustained or property damage. If you are deemed not at fault, the other vehicle’s insurance provider will pay for the damages and medical expenses. Your insurance provider can then recover the cost of the claim paid for the bodily injury and property damage and deductible from the at-fault insurance provider through an insurance instrument known as subrogation.
If the driver who is at fault does not have auto insurance, you can file a claim through uninsured motorist coverage if you have it under your policy.
If you are not at-fault in an accident, your auto insurance premium should not go up as a result.
As of 2022, Texas had a population of nearly 30 million residents (est. 29,730,030), and 200 registered domestic property and casualty (P&C) companies. While Texas leads the nation in the amount of insurers, the Texas insurance market is the second largest in the nation (by the amount of taxes paid), trailing only behind California.
In 2020, an estimated 47 million P&C policies were written in Texas, and the state recorded over $51 billion in premiums paid in. Private auto insurance represented 56% of all policies written, making it the property and casualty market leader.
In 2019, 184 private auto insurance companies recorded $23 Billion in direct premiums in Texas. Out of these, auto liability was written at over $12 Billion (est. $12,446,652,000) (20% of all Texas P&C insurance), and collision & comprehensive was written at $10 Billion (est. $10,119,781,000) (16% of all Texas P&C insurance).
Private auto insurance combined, makes up nearly 36% of all Property & Casualty insurance business in Texas, ranking it 2nd by the amount of written premium.
Commercial auto liability coverage was the third most direct premium written in Texas with over $4.8 Billion (7.62% of annual Texas Property & Casualty).
Auto liability written totaled nearly $4B (est. $3,801,203,000) representing 6% of all Property & Casualty in Texas. Collision and comprehensive premiums were over $1B (est. $1,068,242,000) representing almost 2% of the total P&C market.
Read more about What is Covered by Texas Auto Insurance.
How much you pay monthly for an auto insurance policy depends on your driving record, the type of a vehicle, its age, its appraised value, and the coverage level under your policy.
Average auto insurance in Texas is estimated to cost around $2,000 (per year) for full coverage, about $166 monthly. The average cost of liability coverage is $80 per month. However, if you add comprehensive and collision coverage, your rate may be closer to $150.
An individual’s credit score sometimes influences the rate of premium you pay for your auto insurance. A great credit score sometimes gets an individual better rates, while individuals with a bad credit score may be required to pay more for the coverage. For instance, with a bad or non-existent credit history, you may be paying $250 per month for auto insurance coverage; meanwhile, with a great credit score, you can cut the bill nearly in half.
Age also plays a significant role in determining the premium rate of insurance policies. This is because the probability of a young driver getting into a car accident is much higher than an adult or much older person will. Therefore, young drivers are considered higher risk and more expensive to insure by insurance providers.
Individuals between 16 and 17 may have to pay upwards of $400-500 monthly for an auto insurance policy. In contrast, adults pay about $150-160 if they are in their 20s and $100-125 in their 50s. To stay proactive, you can check your driving record maintained by the Texas Department of Motor Vehicles (DMV) to see how many driving infractions and points you have on your records. If you have points on your driving record, you can take steps like fighting the ticket, attending the state-designated traffic school, or paying all applicable fines promptly.
For a better insight into the cost of auto insurance premiums, consult with a state-licensed insurance agent knowledgeable enough to understand your needs and who can match you with the most cost-effective option that fits your particular set of needs.
Auto insurance in Texas is divided into two parts:
Property damage liability covers the cost of replacement or repairs for damages caused to someone else's car or property in an at-fault accident. So when your neighbor's mailbox is damaged after crashing into it, the property damage liability will cover it. This will also apply to your vehicle if you have certain auto insurance coverage on your car.
Property damage liability covers the cost of replacement or repairs for damages caused to:
In Texas, in an at-fault accident that injures another driver or passenger, bodily injury liability coverage in your auto insurance policy covers the associated medical cost. Note that injuries sustained by the offending driver are not covered by bodily injury liability coverage. At-fault driver’s bodily injury are covered by medical payment coverage, a type of auto insurance not under auto liability insurance.
Texas bodily injury liability coverage usually covers the following:
Liability coverage in Texas covers the payments for property damage and injuries sustained by another person due to an accident in which you are at fault. Auto liability coverage is also known as the State Minimum Coverage in Texas. Vehicle owners in the state must carry their driver's license and Texas Liability Insurance Card as proof of financial responsibility (minimum liability coverage). Auto liability coverage does not protect the driver/vehicle at fault in Texas. However, the passengers in the driver's car at fault will be covered.
In Texas, the minimum liability coverage a driver must have include:
Even though private auto insurance and commercial auto insurance have similar coverage, there are also key differences between a commercial auto insurance policy and your personal auto policy that may include eligibility, definitions, coverages, exclusions, and limits.
The following are some differences between private auto insurance and commercial auto insurance in Texas:
Short-term car insurance typically runs between two and 28 days. While many individuals consider short-term car insurance coverage beneficial, it is not widely available. For instance, you will not likely get any car insurance with a policy term of fewer than six months from a licensed auto insurance company in Texas. However, if you still need to get auto coverage for only a few days or weeks, you can still get it. This article will address how to get temporary car insurance in Texas despite its limited availability or unavailability state-wide.
Discuss your auto insurance needs with state-licensed, knowledgeable, and experienced insurance professionals, who are legally permitted to analyze your insurance needs and offer solutions for them.
Texas Car Insurance 101
Do I Need Auto Insurance in Texas?
What is Covered by Texas Auto Insurance
Auto Liability Insurance in Texas
Collision Auto Insurance in Texas
Comprehensive Auto Insurance in Texas
Gap Insurance in Texas
Non-Owner Car Insurance in Texas
Uninsured Car Insurance in Texas
Parked Car Insurance in Texas
RV Insurance in Texas