Car Insurance in Texas

Only 20 minutes to find $388 in savings.

Everything’s bigger in Texas, at least that’s what they say. And if you live here, you’ll probably agree with this statement, especially when it comes to your auto insurance. Surpassing the national monthly average by a few dollars might not sound that bad, but compared to North Carolina (the cheapest state in the south and the nation), Texas is paying an average $70 more per month. Don’t be discouraged though, when I went on the hunt for coverage in the Lone Star State I found $388 in savings.

I checked yearly premiums for the minimum coverage required in Texas. GEICO was my best quote at $401, and State Farm was close behind at $452. Texas Farm Bureau and Progressive topped the chart both breaking $700. I cannot generalize that these companies will give you your lowest of highest quotes; auto insurance premiums are based on a wide variety of information that will change, possibly drastically, per person.

Each company calculates the same information in different ways. One company may place more emphasis on your sex and age, while another may be more concerned with your employment status and profession. This is why you should make an effort to check as many companies as possible. With every new quote comes the possibility of hundreds in savings.

All of my quotes were completed using each company’s personal online quote tool. Each one took approximately 5-10 minutes to complete. The process could stretch a bit longer if you have any claims or traffic violations to report, so it’s safe to budget 15 minutes per quote. If for any reason you need to, or would prefer, to contact agencies by phone to secure a quote, be prepared for a longer process. In my experience, calls can extend 15-20 minutes. Even still, if you find over $300 in savings like I did, that’s time well spent.

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Our Top 4 Picks for the Best Car Insurance in Texas

I began by selecting the top four companies in customer service rankings (JD Power). I then cross-referenced these agencies with the financial stability reports released by A.M. Best. By these standards I’d recommend any one of these companies to any Texan.

Insurer My quote
GEICO $401
State Farm $452
Texas Farm Bureau $751
Progressive $790

In my investigation of quotes offered by these four companies, I found that they split themselves into two price groups. Interestingly, GEICO was the cheapest rate at $401. State Farm fell in the mid-range 400’s as well. Then the quotes took a sharp jump, with Progressive and Texas Farm Bureau squarely in the mid to upper $700’s. Texas Farm Bureau did top JD Power’s list of the customer service rankings as the best by a slight margin, but otherwise I could find no true explanation for the $300 gap. Instead of paying more for minimum coverage or better service you should think about upgrading to proper protection. It could actually save you money.

Even If You’re Happy, It’s Best to Shop for a New Policy Every Couple of Years

In a study produced by Earnix, 68 percent of all insurance companies polled made strategic pricing changes within a year in order to produce greater profitability. In order to maximize profits, insurance companies have begun using a tool which analyzes information outside of the traditional risk-profile. Complex algorithms analyze your personal data like shopping habits and social media interactions (which is gathered through data mining of big data) to determine how likely you are to look for better prices over time. The process is called price optimization. If you are found to be undeterred by price changes or don’t seem to be concerned with finding your best deal, insurance companies will starting pushing the boundaries of your premium to see how much you’re really willing to lay down.

The act of shopping and gathering quotes from multiple providers will produce a win-win scenario. First, you might find grand savings, the likes of which you couldn’t have imagined! Especially if it has been awhile since you’ve shopped around. Second, even if you find that the policy you currently hold is still your best deal, you’ll also be showing the insurance companies that you aren’t afraid of leaving for a better price. This could save you from incremental price hikes with the purpose of simply stretching your wallet as far as it will open.

Recently a small batch of states (15 in total) have begun to address the use of price optimization within their borders. Some states like California have said that the practice is illegal since it uses information outside of risk-related data. Others, like Vermont, call it a discriminatory practice which also disqualifies it for use as a price influencer. Still others, like New York, have only begun to investigate the practice. Unfortunately, Texas has yet to take a stand against price optimization. This means your protection from unfair price changes is squarely in your hands. Keep an eye out for savings everywhere you can, and remember the more quotes you get, the better off you’ll be in the long run.

Texas’ Minimum Coverage

The Bare Minimum

Texas, the ever rebellious child of the south, proves its anarchical ways by being one of the ultra-rare states not to specifically require automobile insurance to drive its roads. Instead, it provides 5 different ways for an individual to prove financial responsibility and gain the right to operate a vehicle according to state law.

The easiest and probably your best option is liability auto insurance. The minimum coverages must meet $30,000 per injured person in an accident, $60,000 per accident involved, and $25,000 for property damage liability. Otherwise known as a 30/60/25 plan.

If the normal recourse for insurance isn’t your cup of tea, you might try one of the next four ways. Investing a Surety Bond with the Texas Department of Insurance, will guarantee your right to drive the roads of Texas. You’ll essentially be putting up your property as collateral to be foreclosed upon if you can’t pay the damages caused in an accident. Secondly, you might make a deposit of cash or securities worth $55,000 with the county comptroller or judge. In the event of an accident these assets will be liquidated to pay any damages you have caused. Lastly you can become Self-Insured. To become self-insured, you must own at least 25 registered vehicles. Should you be found responsible in an accident, you will be required to pay the same damages that any traditional insurance company would.

The Best Car Insurance is Not Just Cheap Car Insurance

If you think that minimum coverage is all you’ll need, take the following facts into consideration:

  • An automobile accident will occur to the average individual approximately once every 17.9 years.
  • The average cost of a disabling, nonfatal accident is $80,700.

If I decided only to buy a cheap car insurance policy with only the coverage mandated by the Texas government (30/60/25), I could personally be on the hook for over $50,000 after my bodily injury protection ran out. I could owe even more if my property protection (only $25,000) were to be exceeded.

If, instead, I decided to upgrade my coverage to a more appropriate rate (50/100/50) I would certainly have a much better chance at covering all or most of the bills generated by an automobile accident. You may think that an increase in coverage would jack up your premiums to an unreasonable level, but this was not so in my experience. If I chose to upgrade my coverage with GEICO, my lowest quote for the minimum, I would only spend a grand total of $22 more per year! If we calculate those numbers out for 18 years, that’s only $396 more dollars in total. If that is all it took to increase my protection and be better prepared for the future, it would certainly by my first move.

If You Skip Coverage, It’ll Cost You

According to the Texas Department of Insurance, “First time offenders are subject to a fine of up to $350, plus court costs, and may be assessed additional fees…” If you are caught more than once, get ready for fines up to $1,000 and suspension of your driving licensure and privileges for up to 2 years.

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Beat the Average Premium: 9 Ways to Snag Cheap Car Insurance Rates

As the second largest state in the country, Texas is a widely diverse place, and a ton of factors come into play when insurers calculate your rates. Some of them are uncontrollable, but a few are quite simple to take advantage of! Take a look below to see what I mean.

Nine Ways to Lower Your Car Insurance Rates


Why are Texas’ rates so expensive?

What to Expect
Average Monthly Premiums
United States $139
Texas $142
Dallas $155
Houston $153
Laredo $149
Garland $148
Brownsville $148
Amarillo $143
San Antonio $142
Irving $141
Lubbock $140
Richardson $139
Arlington $138
Galveston $138
Austin $136
Fort Worth $133
Plano $132
Odessa $132
El Paso $131
Corpus Christi $131
Waco $129
Abilene $124
College Station $122
Midland $121
Source: Quadrant

Generally speaking, rural states have lower average insurance premiums. And with a 96 percent rural landmass, you might think Texas would be a leader of cheap rates. But when this state goes big, it really goes all out. Back in 2012, Jerry Johns, president of Southwestern Insurance Information Service, said, “Texas is a fast-growing state, and in cities like Dallas, Houston, and San Antonio, the population density is contributing to more accidents, particularly where texting, speed, or alcohol are involved.”

Mr. Johns was quite correct in his assertion of these fast growing cities. Three of the top ten largest cities in the entire country are in Texas; more than any other state. The Texas Tribune noted that between 2010 and 2014 the city of Austin had the largest population increase of any city in the United States, growing by 15.5 percent from 790,390 residents to 912,791. Fort Worth and San Antonio also made the list, both increasing by almost 10 percent in total.

The Lone Star state’s’ size and growth have lead to an influx of drivers on the motorways. More vehicles means more opportunities for accidents, and the insurers are keen to the trend. With population showing no signs of waining, drivers may not see decreases in the average rate for quite a while. This might entice those searching for a better rate to shop around, explore discounts on offer from the various insurers, and find the policy that suits their needs.

What if I’m not a full-time resident?

According to the American Automobile Association, non-residents of Texas, operating a privately owned vehicle, may not make spend more than 25 days in-state during a single calendar month without registering their car in-state. Leniency for military personnel and out-of-state college students is granted.

The Bottom Line

To be best protected in Texas, you’ll need to investigate as many companies as possible. There’s no other way to find the best car insurance policy out there. Fortunately for you, it’s not a difficult task at all, and takes no more than an hour, tops. What do you have to lose?

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