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).|
Use the auto insurance quote comparison worksheet to help you pick the right coverage. 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. In 2023, there were over 23 million private and commercial vehicles registered in Texas and every day this number grows - exposing more and more drivers to the potential harm.
In 2010, there were 392 thousand crashes across Texas. By 2020 the number of accidents went up to over 475 thousand, an increase of over 21 percent. In 2021, Texas Department of Transportation (TxDoT) reported 552,224 crashes statewide. These crashes involved 1,105,884 vehicles, and resulted in 8,393 fatalities. A year earlier, in 2020, there were 475,132 accidents (16% less than in 2021), 939,169 involved vehicles, and 7,099 fatalities. Ten
The top 6 most common reasons for crashes in Texas are:
With 1 out of 5 vehicles in Texas uninsured or underinsured, almost 5 million vehicles 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 your liability exposures and legal requirements. Texas requires you to have auto liability coverage with minimum limits of 30/60/25:
Typically, it is recommended to get auto liability insurance above the Texas minimum liability coverage. This way, if you incur higher liabilities in an accident, they can still be get covered by your insurance, instead of you having to pay out pocket for anything above your policy coverage limit. Nowadays, most vehicles on the road cost more than $25,000, so if you damage one badly, you can run out of coverage really fast. Similarly, $30,000 of bodily injury protection is frequently not enough to cover the high cost of medical treatment, especially when multiple people get hurt.
You need to consider the value of your vehicle and whether you own the car outright 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:
Private auto insurance covers the insurance needs of individuals and businesses using privately owned cars. Private auto insurance protects an individual named a driver on another person's private auto insurance policy. Private auto insurance covers the driver of a vehicle when it is used for social, domestic, and other personal purposes. Most private insurance companies in Texas will cover you when you commute to and from work.
In Texas, some of the common types of private auto insurance include:
Note that you cannot use private auto insurance to carry out any business activity that involves commercial transactions. If you have a business and you have a vehicle to be used for the day-to-day running of the business, you must insure your vehicle with a commercial auto insurance policy.
Commercial auto insurance is a type of auto insurance policy that protects a vehicle used for the day-to-day running of a business, like vehicles used for transportation of goods or passengers. Commercial vehicle insurance covers liabilities that personal auto insurance will typically not cover under its policy. It covers company vehicles, starting from the cars leased by the business owners, to the fleets of commercial trucks. Like private auto insurance, it shares similar vehicle insurance policy coverages like liability, collision, comprehensive, medical payments, and uninsured motorist coverage.
Commercial and private auto insurance have similar coverages and what they are meant to cover. The difference is between where you get it. Most private auto insurers do not provide commercial coverage. Commercial auto insurance is purchased through the Texas-licensed insurance agents and brokers who specialize in Commercial Coverage.
So, what are the coverages in auto insurance in Texas:
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:
The following Texas auto insurance policies will provide coverage for property damage:
Liability coverage is mandated by the Texas Motor Vehicle Safety Responsibility Law. Texas residents must be able to prove that they can cover the property damages and bodily injury resulting from motor vehicle accidents they cause.
Texas drivers are required to maintain property damage (PD) liability coverage at a minimum of $25,000 per accident.
So, if you cause a motor vehicle accident, your auto liability property damage coverage will cover you by paying for the repairs of the “other” car you damaged and any other property that needs repairs.
Typical Texas property damage liability coverage is for $100,000 per accident. Make sure to discuss your coverage needs with a Texas-licensed P&C insurance agent, who can provide professional advice based on your specific needs and the best options to fill them.
Comprehensive coverage - protects you when damage caused to your vehicle results from such things as natural disasters, fire, riots, vandalism, or even motor vehicle theft. Comprehensive auto insurance is a cost-effective way of providing coverage for damages caused to your vehicle by anything other than a collision.
Although it is optional coverage on your auto insurance policy, it may not be optional for you if you lease or finance your vehicle. The insurer prescribes the limit based on the vehicle's actual cash value (ACV). For example, when a car is damaged by fire, the insurance provider will replace it at the vehicle's depreciated value at the time of the incident,minus the deductible.
Collision coverage - Collision auto insurance in Texas helps pay for the repairs or replacement of your own vehicle after a motor vehicle accident or collision with an object. Collision coverage is useful even when the driver is not at fault. Collision auto insurance is not compulsory in Texas; nonetheless, individuals purchase it to give themselves full coverage. However, if a vehicle is leased or financed by a lender, a driver may be required to buy collision auto insurance. Collision auto insurance does not have a coverage limit, and what the insurance provider pays is the actual cash value of your motor vehicle.
Uninsured coverage (UI) in Texas protects an individual from property damage when they get into an accident with someone without the state minimum liability coverage requirements or a hit and run driver. Property damage coverage in uninsured insurance provides repairs and replacements for damages caused to your vehicle by an uninsured at-fault driver. UI coverage also protects family members, passengers, and anyone entitled to coverage under the policy.
In theory, the state requires every driver to have liability coverage; however, not all drivers in Texas purchase it. So when you get into an accident that is not your fault and the guilty party is uninsured, the uninsured insurance coverage will kick in to repair your property damage. Even though uninsured insurance coverage is optional, Texas insurance providers must ensure they offer it to you. You have the right to decline purchase.
Underinsured coverage in Texas covers an insured driver when the at-fault driver's liability coverage is not enough to cover the cost of repairs or replacement of property damage. An underinsured motorist coverage completes the amount the at-fault driver's coverage cannot cover. So if the at-fault driver has below the minimum liability coverage and incurred damage that goes beyond their insufficient coverage, your underinsured motorist coverage will cover the rest.
Underinsured coverage is very important in Texas, because of the large amount of out-of-state traffic flowing through it. You don’t know their coverage. For example, the property damage liability for the vehicles registered in California is $5,000, while the vehicles from Michigan have a $1 Million property coverage by law.
Like uninsured coverage, insurance providers must offer an insured the option of purchasing the underinsured insurance coverage. The insured has the option of declining purchase.
Typical Uninsured/Underinsured Motorist Bodily Injury coverage in Texas is: $300,000 per person/$500,000 per accident.
Gap coverage in Texas is an optional auto insurance coverage that helps pay the remainder of an individual's car loan or lease if the vehicle is deemed a total loss after an accident or theft. Only the original loan holder or original leaseholder can purchase auto gap insurance coverage in Texas. Such individuals must owe more than the car's depreciated value, that is, the actual car value. When the insurance provider pays the claim for the damage done to a leased or loaned vehicle, gap auto insurance coverage settles whatever amount is yet to be covered. When the loan is paid off, it allows the individual to start afresh with a new vehicle purchase.
Liability, collision, and comprehensive coverage cannot provide enough coverage in such a situation where your car value has depreciated below the debt owed. This is why Gap insurance is used together with collision and comprehensive coverage.
Non-owner coverage in Texas is also known as non-owned auto. It provides liability coverage for property damage for individuals who drive motor vehicles that they do not personally own. Just like auto liability insurance, when an individual is at fault, their non-owner car insurance coverage protects them from incurring financial liabilities. The difference between non-owner and auto liability insurance coverage is that the latter is personal liability insurance, while the former provides coverage for cars not owned personally.
Insurance providers consider business drivers more significant risks because they are often on the road. The probability of being involved in a vehicle accident is higher than those who commute to and from work once a day. This is why non-owner auto insurance does not cover business use; what is required is a commercial auto policy. However, if you occasionally use your vehicle for work, your auto insurance may cover the liability incurred if you get into an accident.
New car replacement coverage (also known as Car Replacement Assistance - CRA) helps the insured pay for a replacement vehicle, by paying out 10%-20% over the Actual Cash Value (ACV). CRA acts similarly to Gap insurance, but does not require an active upside-down loan. It is an extra feature.
For example, if the covered vehicle with an ACV of $30,000 is totaled, the policy with a CRA of 20% will pay 120% of the ACV (minus the deductible). $30,000x120%= $36,000. The highest auto deductible in Texas is $1,000. $36,000-$1,000=$35,000. The insured with a total vehicle and ACV of 20% receives $35,000 in case of a total loss.
When an individual buys a new car, they may want to consider getting this coverage so that if the car gets totaled in a crash or stolen, they can more easily afford to transition to a higher priced vehicle.
New car replacement coverage is an optional add-on in Texas, and you can buy it in addition to the auto insurance full coverage. Talk to your insurer or to a knowledgeable state-licensed insurance agent, to find out more.
Parked car coverage in Texas is all about comprehensive-only auto insurance coverage. Typically, a parked car poses no danger of collision or causing damage to the property; however, if a tree or pole falls on a garage and causes damage to the vehicle, the parked car insurance will cover it. If you do not have parked car insurance, you may have to carry the responsibility of paying for it out of your own pocket.
It is important to note that if the cost for repairs or replacement bills exceeds your liability coverage limits, you will bear the excess cost by paying out of your own pockets. Make sure to discuss your auto insurance needs only with state-licensed insurance professionals, who are able to make recommendations based on your particular set of needs.
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:
The following auto insurance policies will provide coverage for bodily injury in Texas:
Auto liability coverage protects third parties in the case of bodily injuries and property damage sustained in an accident caused by the insured.
Texas drivers are required to maintain bodily injury (BI) liability coverage at a minimum of:
$30,000 due to bodily injury coverage, per injured individual
$60,000 due to bodily injury or death of two or more individuals, per accident
If you are a vehicle owner living in Texas, you must carry bodily injury coverage. Texas is an at-fault state, which requires the driver at fault to bear all the financial consequences that may arise following a vehicle accident. Otherwise, their driver's license may be suspended or revoked by the Texas Department of Motor Vehicles if they fail to provide proof of insurance.
Medical payment coverage is an optional auto insurance coverage that helps pay for you and your passenger's bodily injuries by covering medical expenses regardless of who was at fault in an accident.
Auto insurance providers are responsible for the first payments for the bodily injury when an accident occurs. This is the main reason why all Texans are required to have auto liability coverage. The coverage amount for medical expenses is paid up to the at-fault driver's policy limits. After that your health insurance can come into play if required.
If a health insurance provider pays the medical expenses first, the health insurance provider recovers the paid claims from the auto insurance provider of the at-fault driver.
Personal Injury Protection (PIP) coverage covers bodily injury by paying the medical expenses, lost wages, and other incidental costs of an insured driver after sustaining an injury in an accident, regardless of whether they are at fault or not. PIP coverage also covers lost wages or other health benefits not covered under a health insurance policy in Texas. It is important to note that all auto policies in Texas include the PIP coverage; however it is not mandatory for Texans. Texas drivers are offered a minimum of $2,500 PIP coverage if they do not waive it. This means they may decide to get additional protection but cannot go below the minimum limit of $2,500. If you do not want PIP coverage in your auto insurance policy, you must typically make sure you inform your insurance provider in writing.
Typical Texas PIP coverage is for $25,000 per person. Discuss your specific needs with an insurance professional, to get a customized solution and advice.
Uninsured motorist coverage may be the best way to protect yourself in case of bodily injury. UI/BI provides medical expenses coverage for everyone in your vehicle when the at-fault driver does not have the minimum auto insurance liability. It also includes lost wages and pain and suffering the insured driver and passengers in the vehicle experience during recovery. Most insurance providers in Texas will offer you uninsured motorist coverage; you are at liberty to decline it.
Underinsured motorist coverage in Texas covers whatever is left of an at-fault driver's bodily injury liability limit by providing coverage for medical expenses, vehicle repairs, replacement, lost wages, pain, and suffering when the at-fault driver's liability has been exhausted. That is, you will be protected when someone who does not have enough auto insurance coverage hits you. Most insurance providers in Texas usually offer motor vehicle owners underinsured motorist coverage; if you do not want it, you can voluntarily decline it.
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:
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.
The most common Texas liability coverage is for:
Note that auto liability is not only crucial for privately owned motor vehicles; it is equally important for commercial vehicles. Suppose you run a business that uses motor vehicles to run errands, carry equipment, and transport your clients. In that case, you must get commercial general liability coverage as an optional add-on for your commercial auto insurance. The commercial auto insurance coverage covers liability incurred and damage to the vehicle, such as your cars, trucks, and vans registered for your business's day-to-day running. It also covers claims of bodily injury arising out of the business's day-to-day running.
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 needs with a Texas-licensed auto insurance agent who can advise you on the needed coverage. For example, if you lease a car for a business or use your own vehicle for business purposes, it must be insured by a commercial insurance, which is usually sold by the agents specializing in commercial coverage.
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