The last thing you want to think about when moving to a new state is getting insurance. If you’ve just moved to Texas or if you’ve lived there your whole life and want to ensure you’re getting the best deal, it’s important to understand as much as you can about car insurance.
When it comes to auto insurance, studies have shown that Texans tend to pay more than the national average. It helps to know the minimum coverage levels and what you can do to push down the cost of your premium.
Average car insurance in Texas
The average annual cost of car insurance in the US is $941.65 while the average paid in Texas is $1,044. This is just under 11 percent more than the national average.
You should keep in mind that average auto insurance rates only tell you so much. There are several factors that go into setting the cost of your policy that are dependent on the individual as well as the insurance company you decide to go with. While you shouldn’t put too much stock into that number, it does help to keep it in mind while you’re looking around for the best rate.
One of those factors include the area you’re living in. When it comes to cities in Texas, Houston, McAllen, and Mission rank as the most expensive while Memphis, Ballinger, and Childress were the least expensive areas.
These differences come down to aspects, such as the population density and the average commute time.
Why is car insurance more expensive in Texas?
In general, car insurance rates have increased over the past couple of years. But here are a few reasons why Texas’ insurance rates could be more expensive than the average.
- Large urban population – Texas has a high percentage of the population living in urban areas. As of 2010, the urban population in the US is 80 percent whereas Texas is 84 percent. In general, urban areas pay more than rural areas for car insurance.
- Long commute time – In Houston alone, 72 percent of the population drives to work with an average commute of 26 minutes. Drivers in Houston and Austin also rank in the top 25 in North America for time spent in traffic.
- Driving trends – Texans drive a lot compared to other states. Drivers living in urban and suburban areas take more vehicle trips and drive more daily miles per capita. The more you drive, the higher the insurance rates.
The car insurance requirements in Texas
Any rules that affect car insurance are decided at the state and not national level, so things will be different if you’re moving to Texas and buying insurance.
Here’s what you need to know about the regulations for car insurance Texas has in place.
The minimum coverage levels
Drivers in Texas are legally required to have liability coverage. This insurance pays for injury and lost wages that you may cause to another driver or their passengers. This also covers any damage to the other driver’s vehicle if you are deemed to be at fault in an accident.
The minimum requirements are 30/60/25. This means:
- Bodily Injury $30,000 per person. This is the maximum dollar amount that covers one person that you injure in an car accident.
- Bodily Injury $60,000 per accident. This is the maximum dollar amount that pays for any injuries you cause in an accident if more than one person is hurt.
- Property Damage $25,000 per accident. This is the maximum dollar amount that pays for the damage you cause in an accident.
If you decide to only purchase the minimum required by the state, this most likely will not be enough to cover all the costs in an accident.
The minimum liability coverage only covers other people’s injuries and damages to their car. It doesn’t cover you or your vehicle.
Other types of coverage
The state doesn’t require drivers to have insurance against uninsured and underinsured drivers. But it might be something to consider including in your policy.
This insurance protects you if you’re hurt in an accident caused by a driver who doesn’t have insurance or who doesn’t have enough coverage to take care of the damages.
Medical payments vs PIP
Texas is the only state that offers medical payments (MedPay) and personal injury protection (PIP) as options for additional coverage. It’s an add-on to your car insurance policy. Both pay for medical services for any injuries you get that are caused by a car accident.
Both are coverages that follow you. You will be covered even if you are injured when you aren’t driving. You could be a passenger in someone else’s vehicle, or hit by a car as a pedestrian or while on a bike.
MedPay and PIP are similar, but MedPay’s coverage is limited. PIP covers your immediate relatives and people under the same policy as you and takes care of any medical, surgical, rehabilitation, and psychiatric care. It will also provide compensation for lost work wages.
On the other hand, MedPay will only cover the medical bills of the insured and only covers direct medical and surgical care after an accident.
Even though car insurance in Texas is higher than the national average, there are always ways to save on your policy.
When you’re talking to different insurers, you can ask about any discounts that you are eligible for that could potentially save you money.
The kinds of discounts that insurance companies often offer are:
- More than one car on a policy
- Clean driving record and a claims-free history. Providing a letter of experience could prove this to the insurance company.
- Taking a defensive driving course
- The type of equipment in your car (anti-lock brakes, anti-theft devices)
- Low mileage discount (if your annual mileage is under a certain threshold)
Other ways to save on car insurance
Discounts vary from company to company and there’s never a guarantee that you’re eligible for them, so there are plenty of other ways to help you lower your premium.
- Increase your deductible – There’s a direct correlation between higher premiums and lower deductibles. Increasing your deductible is the easiest way to lower your auto insurance costs.
- Reconsider the type of insurance you have – If you are insuring an older car close to 10 years, you might want to think about dropping full coverage and opting for liability coverage only.
- Pay close attention to your credit score – Drivers with a low credit score can pay as much as twice more than those with good credit history. Make sure you’re paying your bills on time. And request a credit report to correct any errors you see.
- Drive less – You can consider carpooling or other means of transportation to get to work. The less time you’re on the road driving, the less likely you’ll be involved in an accident. The insurance company will view you as less of a risk and this could drive down your premium.
- Bundle insurance – If you’re looking for renters or homeowners insurance, think about getting it with the same insurer. It could give you a price break.
Getting a quote in Texas
There are a number of insurance companies in Texas. Getting multiple quotes isn’t difficult. The only way to know if you’re getting the best rate is to shop around.
While it can be tedious to go through the process, you can look into services who do the work for you.
At Cover, we work with over 30 carriers to get you a quote that’s the best rate on the market for the coverage you want. Not only are we an insurance brokerage, but we’re now selling our own auto policies in Texas.
A cheaper quote or a $50 Amazon gift card
If Cover can’t find you a lower premium for the same level of coverage as your current policy, we’ll give you a $50 Amazon gift card. To be eligible, you must:
- Live in Texas
- Over 22 years old
- Have at least 6 months of continuous prior insurance
- Have a spotless driving record: no accidents or violations in the past 3 years, no major violations within the past 10 years, and no claims on your driving record