Why Is Car Insurance So Expensive in Texas?
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Written byEmily Guy Birken
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Emily Guy BirkenPersonal Finance Writer
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Edited byMatthew Gross
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Matthew GrossEditor
Updated
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Texas drivers pay about 15% more for auto insurance than the U.S. national average, according to our research. These higher premium rates are partially due to the Texas Department of Insurance requirement that all automobile insurance policies include personal injury protection (PIP) and uninsured/underinsured motorist (UM/UIM) coverage.[1] Texas drivers must write to insurance companies if they don’t want these coverages.
No matter what you pay for car insurance, Texans have a number of ways to get cheaper car insurance. Here’s everything you need to know about why car insurance is so expensive in Texas and how you can get lower rates.
Breaking Down Texas’ High Auto Insurance Rates
Drivers in Texas pay an average of $117 per month for liability-only auto insurance and $213 for full coverage. That’s more than the U.S. national average of $99 and $182, respectively.
The National Association of Insurance Commissioners found that the average annual cost of Texas car insurance increased by almost 10% between 2021 and 2022.[2] Insurance costs nationwide increased by only 6% in that time.
A number of factors contribute to the Lone Star State’s high auto insurance costs, including:
Severe storms: Texas is vulnerable to major weather events — including hurricanes, tornadoes, and flooding — which could lead to auto insurance claims.[3] [4]
Regulations: The Texas Department of Insurance requires insurers to include PIP and uninsured/underinsured motorist coverage in all auto insurance policies. Drivers have to opt out of this coverage in writing if they don’t want it.
Uninsured drivers: The Insurance Information Institute estimates that 14% of all drivers on Texas roads are uninsured.[5]
Newer cars: Because of their advanced technology, late-model cars have higher repair costs. Texas has one of the highest levels of new car sales in the nation, according to the National Automobile Dealers Association.[6]
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How to Save Money on Your Car Insurance in Texas
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Despite the high average insurance costs in Texas, you can save money on your premiums in many ways. Consider trying these strategies to lower your insurance costs:
Opt out of coverage. PIP and UM/UIM coverage come standard in all Texas car insurance policies, but you can opt out of them in writing.
Increase your deductible. A higher deductible means lower monthly premiums. But make sure you have money set aside because you’ll pay more out of pocket if you file a claim.
Maintain a clean driving record. Obeying the speed limit and driving defensively can lower your rates since safe drivers pay lower premiums.
Ask about discounts. Almost every insurance company offers discounts for bundling, safety features, association membership, and more.
Improve your credit. Insurers offer lower premiums to drivers with excellent credit.
The Cheapest Car Insurance Companies in Texas
Texas may have high average rates for car insurance, but comparing rates can help you find the cheapest coverage. The three insurers in the table below are the most affordable car insurance companies in Texas, according to Compare.com data. They’re a great place to start your search for lower rates.
The below national rates are estimated rates current as of: Tuesday, June 30 at 5:00 PM PDT.
Average Liability Rates by Company
Company | Average Monthly Premium |
|---|---|
| State Farm | $56 |
| Allstate | $79 |
| Progressive | $81 |
| Mile Auto | $82 |
| GEICO | $89 |
| USAA | $100 |
| Mercury | $110 |
| First Acceptance | $111 |
| The General | $114 |
| Alinsco | $116 |
| Lone Star | $119 |
| GAINSCO | $122 |
| Commonwealth Casualty | $124 |
| Clearcover | $127 |
| Bristol West | $128 |
| Covercube | $128 |
| Root | $130 |
| Dairyland | $131 |
| Mendota | $135 |
| AssuranceAmerica | $136 |
| Sun Coast | $138 |
| Excepsure | $139 |
| Safeco | $142 |
| Direct Auto | $144 |
| Loop | $150 |
| National General | $150 |
| Elephant | $152 |
| Chubb | $170 |
| Trexis One | $176 |
| Insurify Car | $194 |
| 21st Century | $196 |
| Hugo | $203 |
| Liberty Mutual | $234 |
| Foremost | $276 |
State Farm is the cheapest car insurance company in the Lone Star State, with an average monthly price of $56 for liability-only insurance, according to our research.
FAQs About Why Car Insurance Is Expensive in Texas
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Drivers in Texas pay more than the U.S. national average for car insurance. We’ve answered some common questions about insurance in Texas to help you understand why.
Is Texas expensive for car insurance?
Yes, car insurance in Texas can be expensive. The average policy costs about 15% more than the U.S. national average, but rates can vary by factors like age, driving record, and location.
What state has the worst insurance rates?
Louisiana and Florida have the highest insurance rates.[7] Severe weather and high accident rates are the primary reasons premiums are so expensive in these two states.
Have car insurance rates gone up in Texas?
Yes. Car insurance rates increased by 9% between 2021 and 2022, according to the most recent data available from the National Association of Insurance Commissioners (NAIC).
Sources
- Texas Department of Insurance. "Auto insurance guide."
- National Association of Insurance Commissioners. "2022 Auto Insurance Database Average Premium Supplement."
- Office of Public Insurance Counsel. "Why Are Insurance Rates Increasing in Texas?."
- Federal Emergency Management Agency. "National Risk Index."
- Insurance Information Institute. "Facts + Statistics: Uninsured motorists."
- National Automobile Dealers Association. "2024 Annual Financial Profile of America's Franchised New-Car Dealerships."
- Insurance Information Institute. "Facts + Statistics: Auto insurance."
Methodology
Data scientists at Compare.com analyzed more than 50 million real-time auto insurance quotes from more than 75 partner insurers in order to compile the rates and statistics seen in this article. Compare.com’s auto insurance data includes coverage analysis and details on drivers’ vehicles, driving records, insurance histories, and demographic information.
All the rates listed in this article have been collected from a combination of real Compare.com quotes and external insurance rate data gathered in collaboration with Quadrant Information Services. Compare.com uses these observations to provide readers with insights into how auto insurance companies determine their premiums.
About Compare.com
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Emily Guy BirkenPersonal Finance Writer
Matthew GrossEditor