Texas is an expensive state for car insurance with an average premium above $1,500 a year. That will increase by about 4.8% on average effective March 1, 2021 according to Insurance Journal. According to the commissioner of the Texas Department of Insurance, the March 2021 increases represent “increases of 5.0% for bodily injury liability, 5.0% for property damage liability, 0.0% for personal injury protection, 0.0% for uninsured/underinsured motorist bodily injury liability, and 0.0% for uninsured/underinsured motorist property damage liability rates”
With this bump in cost for 2021 in mind, we researched the cheapest insurers in Texas to see how you can save money on car insurance.
We sampled information from a number of sources and developed a range of what cheap car insurance usually costs in Texas. We based these samples on a driver with at least a decade of driving experience, a clean driving record, driving America’s most popular, non-exotic vehicles.
The important thing to remember is that insurance rates can vary widely, and prices can change almost daily. This range is only a GUIDE to give you a basic idea about the rates insurance companies charge today in Texas.
DISCLAIMER: There are numerous other factors that are going to impact the cost of insurance on your car, crossover, or truck. We’ll provide info on some of those variables, but your best bet is to read our deep dive on Cheap Car Insurance for 2021 to get a better idea.
Best Large Insurance Carrier - State Farm. Among national, brand-name carriers outside of USAA, we found that State Farm provided the least expensive car insurance in the state.
Cheapest Insurance with Bad Credit - Texas Farm Bureau. Texas is one of the states that allow insurers to charge those with poor credit more than those with a high credit rating. Bad credit will mean you pay 35% to over 100% more for car insurance that you would if you had good credit in Texas. The data we found pointed to Texas Farm Bureau as the best bet for this group.
Cheapest Insurance with One Accident - Texas Farm Bureau. Again, Texas Farm Bureau stings you the least if, heaven forbid, you actually had to use the insurance you bought.
Cheapest Insurance for Higher Mileage - Guess who? If you are a high-mileage driver the data we found again points to Texas Farm Bureau as the best deal. This company has over 1 million customers in Texas. Maybe they make it up in volume?
In our larger story on car insurance, we found that a national average for auto insurance was $1,341. In Texas, depending on what city and county you live in, you’re probably going to be paying up to 20% More. Our prior research also revealed that the overall average is about $1,560 for insurance in Texas.
|Rates we found reported as “typical” or “average” (annual) online||Average (annual)||Adjusted average* (annual)|
|Texas Farm Bureau||$1,093. $1,764 $1,261||$1,376||$1,261|
|State Farm||$1,691, $1,653, $1,577,$1,204,$1,343||$1,494||$1,524|
|USAA**||$1,534, $965, $2,401||$1,637||$1,535|
|Geico||$1,268, $1,665, $1,367, $1,298, $,3024||$1,724||$1,443|
|Allstate||$2,643, $2,311, $2,280||$2,412||$2,312|
(*) The “adjusted average” is computed by eliminating the highest and lowest values and averaging the remaining values.
(**) You may need to have or have had an association with the military to qualify for USAA.
Compare quotes from multiple providers to get a good deal.
Let’s start by asking, “Why is insurance expensive in Texas to begin with.” There are some factual answers. Texas is the state ranked number one for natural disasters in the modern age according to World Atlas. 2017’s Hurricane Harvey, in particular, kicked up car insurance rates in the state of Texas. Texas is also ranked number one in hail damage in most years. Everything's bigger in Texas. Even the weather.
Another unfortunately high ranking Texas can claim is drunk driving deaths. The South is the region that has the highest rate overall, and Texas ranks 11th worst among the U.S. states.
Texas also has unusually high speed limits. Whether it is an excuse or based on factual crash data, state speed limits above 65 MPH scares the pants off insurers. Speed limits of 75 MPH are common in Texas, and in some specific areas limits are as high as 85 MPH according to IIHS.
The majority of the population in Texas live in large urban metro areas. Most live in the triangle defined by Dallas-Fort Worth/Arlington in the North, San Antonio in the Southwest, and Houston in the Southeast. Austin and College Station fall within the triangle. Living in dense urban areas increases the risk to an insurer, who in turn passes that on to you in the form of higher premiums. You may in fact find that if you live in a rural part of the state, your insurance costs may be lower than average.
Of course accidents, speeding tickets, the type of car you drive, your age, and many other factors come into play with regard to your insurance costs. If you are young, have a few tickets under your belt buckle, a crash or two, and you drive a pricey luxury truck you may as well go ahead and dedicate each Monday’s earnings to your car insurer.
Crashing is a big no-no when it comes to insurance costs. If you wrinkle the fenders your insurance rate is going to go up. Exactly how much is fuzzy math. Texas is one of the many states that uses a “fault” system. That means that after an accident one party will be paying more through their insurance to cover the claims. However, even if you are not the party at fault your insurance can still go up.
Here are the best estimates we could find from various sources on how much one accident will raise your policy premium in Texas.
|Range of Rate Increases for One Accident||Average of Rate Increases||Adjusted Average of Rate Increases|
|36%, 40%, 40%, 56%||43%||40%|
This information is just an approximation. Many factors can change how much your insurance goes up after you have one accident. For example, if you’ve paid more in your annual insurance cost to be a part of an Accident Forgiveness program, your increase for one accident is 0%, but your overall cost of insurance is higher every year than if you hadn’t. Almost all of the insurers on our list above of cheap insurance providers, and many others, offer this option which was popularized by Allstate.
Tickets are also a quick way to see your insurance rates jump. How much will vary on the type of ticket and the severity of the offense.
If you got a ticket in Texas and want to attend driving school to try to reduce your points and surcharge, it is an option. There have been major changes to the law in Texas related to the penalties for getting a speeding ticket, so we highly recommend this Car Talk story on the subject of traffic school in Texas.
Here is the data we could dig up on the percent increase range a ticket will raise your car insurance policy premium in Texas:
|Range of Rate Increases for One Speeding Violation||Average of Rate Increases||Adjusted Average of Rate|
|11%, 15%, 15%, 25%, 44%||22%||18%|
The most significant discount you can realize in Texas is to move out of the triangle. Even just being outside of the downtown area can help. Move to a rural area with low crime rates and low population density and you may save as much as $1,000 per year. But that comes with a lifestyle change many are not willing to make.
The easier way to manage your insurance costs is to avoid accidents and speeding tickets. And there is help on the way. Avoiding accidents has gotten easier in recent years as vehicles with adaptive cruise control and automatic emergency braking systems have come to market, even in affordable vehicles like the Honda Civic and Toyota Corolla. Ironically, insurers don’t discount cars with those systems yet because they cost a lot to repair (so they say…)
Avoiding speeding tickets in Texas is also easier than in many states. The speed limit in Texas on a lonely state highway is as much as 35 MPH higher than in New York. And there is always Waze to help you know where “The Man” is setting up today's revenue generation station (speed trap).
We also have an entire story on the tens of thousands of discount programs available, based on memberships, military service, and other associations. Some of the more common meaningful discounts relate to low mileage driving, bundling with your home owner’s policy, and carrying high deductibles. Students take note: Many insurers will offer good students a discount. Parents take note: If your kid is at college more than 100 miles away you may see big savings.
If you are stopped without car insurance in Texas the first time you will be fined $350. A second time you get a much larger fine and you lose your license. Car insurance minimums are mandated by Texas state law. To drive in Texas, you must have at least $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 called 30/60/25. Almost no homeowner with any assets will buy just the basic coverage required by law. More typical is coverage on the order of 100/300/50 plus additional insurance to cover you in the event an uninsured motorist hits you. It seems unfair, but that’s the way it works.
Nearly every state’s minimum is way too low. If you have a vehicle loan or lease, or own a home, you will find that you are required to carry higher levels of coverage to satisfy other agreements and responsibilities you have. Our focus in this story is on cheap car insurance. However, for a full list of all the coverage you may want to buy, check out the Texas Department Of Insurance’s “Insurance Made Easy” page. The site does its best, but easy isn’t the word we would choose to describe opting in or out of optional insurance coverage.
Compare quotes from multiple providers to get a good deal.
Insurance rates vary greatly between carriers and even between policyholders. Our research showed that the Texas Farm Bureau and large carriers like State Farm and Geico have the best rates. If you qualify for coverage by USAA we also suggest that company be on your shortlist.
Regional carriers may be able to offer extremely discounted rates for people in a limited geographic area, but sometimes not. Direct General, for example, offers coverage in a dozen southeastern states, and their rates are in the middle of the pack.
Average annual cost of insurance in Texas ends up being about $1,400.
It’s not. $1,400 per year is right around the national average. If you think Texas is expensive, you should try living in Florida.
The average policy in Texas costs about $1,500 per year and is expected to rise to about $1,580 starting March 1, 2021.
There’s no tried-and-true rule for getting cheap car insurance. The best rates available to you will depend on where you live, your driving record, the coverage you need, the type of vehicle you own, and other factors like your credit score. Also, make the carrier aware of other memberships or special circumstances you have. If you’re a veteran, active military, senior citizen, or if you have a membership to an organization like AAA or AARP, you may be eligible for discounted or special rates.
Years ago, only a few companies offered online applications for their insurance policies, but that has changed in recent years. Almost all insurance carriers offer an online-only option to apply for coverage now, so it’s just a matter of shopping around. Data reported on multiple sources shows that USAA is still one of the most affordable options, but well-known insurance carriers State Farm aren’t far behind for many people.
Unsurprisingly, some car insurers have been called out by their customers for having poor customer service and in some cases unexpected rate changes. We recommend checking recent online reviews before you switch to a new carrier.
Unfortunately, yes. The Federal Trade Commission found that low credit scores were relatively accurate predictors of a driver’s risk for an accident. As a result, insurance companies will sometimes charge higher rates and have more restrictive coverage offerings for people with spotty credit histories. Texas is one of the states that allow your credit score to impact your annual insurance cost.
The state of Texas does not require insurers to offer low-income car insurance.
Full coverage costs vary by carrier. Texas Farm Bureau, USAA, Geico, and State Farm are all among the cheapest full coverage providers in Texas.
Texas requires insurance by law. If you are unable to afford any coverage, the best option will be finding alternative transportation like Uber and Lyft.
One day insurance can be very helpful if you’re buying a car or moving a vehicle from one location or another. You can also buy temporary coverage and supplemental coverage for special activities like track days and off-roading.
Shopping around is the best strategy to find the best rates. Companies will often compete with each other for your business. You can also take advantage of any other memberships you might have, like AAA or AARP for discounts.
No. Lying about any part of your insurance application can result in lost coverage, uncovered accidents, or legal action.
The short answer is “Because you live in Texas.” Beyond that, your age, marital status, the city or town you live in, your credit score, and your driving record all have an influence.
An older car is not always cheaper to insure. Insurance companies use complex algorithms with many factors to set a price. The value of the vehicle does matter.
In the best-case scenario – nothing. In many cases, you’ll be able to go to traffic school or some other remedial program to have the ticket removed from your record. (See our story on the best Traffic School in Texas for more info.) If not, you may see a rate increase the next time you renew your policy or shop for a new policy.
Car insurance becomes expensive for people with spotty driving records, poor credit, or for those that live in extremely congested areas with other people that get into lots of accidents. Insurance is a numbers game, and companies are constantly trying to adjust their rates to match their perceived level of risk.