Why Is Car Insurance So Expensive in Texas?

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 $118 per month for liability-only auto insurance and $216 for full coverage. That’s more than the U.S. national average of $101 and $185, 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

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.

State Farm is the cheapest car insurance company in the Lone Star State, with an average monthly price of $62 for liability-only insurance, according to our research.

FAQs About Why Car Insurance Is Expensive in Texas