Why is Texas Auto Insurance so Expensive?

Texas auto insurance costs less than the average across the country, but it might still hit your wallet hard based on your personal details. Are you wondering why Texas auto insurance is expensive?

Several drivers have probably noticed that their car insurance costs keep going up. It’s not just you; it’s been happening to lots of folks over the past few years.

There isn’t just one reason why Auto insurance is expensive in Texas. However, there are a couple of things that might be making it that way.

The total coverage auto insurance bill in Texas could also be influenced by state-specific issues such as how often cars get stolen, high-speed limits, and how crowded the highways are.

Let’s look into what makes car insurance expensive in Texas.

An image illustration of why is Texas Auto Insurance Expensive
Source: Shutterstock

What’s the Cost of Car Insurance in Texas?

Auto insurance is a must-have in Texas. On average, it costs about $1,818 per year there, while across the country, it’s about $1,431.

When you’re looking for car insurance, knowing what others typically pay in your area can be useful.

You don’t want to overspend, so it’s good to ask about discounts to try and get a price closer to the average.

However, don’t rely too much on these average rates. They only tell part of the story because a lot of things determine your actual rate.

It depends on you as a driver and the specific insurance company you’re getting a quote from.

Prices can vary a lot not just across Texas but even within cities. Where you live really matters when it comes to insurance.

Even moving just a few miles away can change how much you pay.

Why is Texas Auto Insurance so Expensive?

Auto insurance in Texas is so expensive because there are a lot of people in cities, many highways, frequent car thefts, higher speed limits, and more natural disasters.

All these make accidents more likely, so insurance companies often have to pay more claims.

Auto insurance in Texas can be expensive for several reasons:

  • Lots of Roads and Traffic: Texas has a lot of highways and roads where drivers spend a ton of time with each other. Because of this, there’s a higher chance of accidents happening. Auto insurance companies see this as a bigger risk, so they charge more.
  • Crowded Cities: In Texas, there are a bunch of people living in cities. As a result, urban areas tend to have more accidents, car thefts, and vandalism. Because insurance companies get more claims from these places, they raise the prices.
  • Car Thefts: Texas also has more car thefts than other states in the U.S. Since insurance companies expect more claims when theft rates are high, they make you pay more for insurance.
  • Fast Driving: The speed limits in Texas are high compared to the rest of the country. Roads in Texas allow up to 85 mph, while the average in the U.S. is about 70 mph. When people drive faster, there’s a greater chance of accidents. So, insurance companies charge higher rates to cover the risk.
  • Natural Disasters: Texas often faces natural disasters like wildfires, hurricanes, and storms. These disasters can damage vehicles, leading to more claims. Because these events happen a lot, there’s a higher chance drivers will need to claim insurance, leading to higher costs.  As a result, auto insurance in Texas is very expensive.

Factors Contributing to Expensive Auto Insurance for Drivers in Texas

The cost of car insurance in Texas can be high due to factors specific to the state that you can’t change.

Moreover, these factors can be unique to you as an individual and you might be able to control them.

These state-specific factors impact insurance prices for everyone in Texas.

Location and Zip Code

Where you live in Texas can affect how much you pay for car insurance. Additionally, the prices can be different depending on your Zip code.

Average Car Insurance in Texas states and cities

Location Annual Premium (USD)
Texas State Average 1,316
Houston 1,560
Wichita Falls 1,052

Insurance Provider

If you want cheap auto insurance in Texas, it’s smart to check out different insurance companies and compare their prices.

Prices can differ from one company to another, so it’s worth shopping around.

Finding a company that gives you a good deal and treats you well is key to getting the best auto insurance in Texas.

Age

Your age plays a role in how much you’ll pay for car insurance in Texas. Younger drivers usually have to shell out more because they’re considered riskier due to their lack of experience.

For instance, a 16-year-old driver in Texas might have to pay over $3,548 each year on average for car insurance, while a 40-year-old driver would pay a lot less at about $1,316 per year.

Those who are 30 years old tend to get the best deal, with average premiums around $1,094 per year.

Here’s a comparison table of the average auto insurance rates by Age

Age Average Car Insurance Rate in Texas
16-Year-Old $3,548
25-Year-Old $1,211
40-Year-Old $1,316

Driving History

Your driving history plays a big role in how much you pay for auto insurance in Texas.

If you have a bad record with things like DUIs or accidents you caused, your insurance costs will be expensive because you’re seen as more likely to have problems on the road.

For example, in Texas, someone with a DUI might pay around $1,987 a year for insurance, while someone with a clean record pays about $1,316 a year.

If you get caught speeding, you could end up paying an extra $134 each year for insurance.

Below is a table showing the average auto insurance rates in Texas by Driving History

Driving Record Average Yearly Cost of Car Insurance in Texas
No Violation $1,316
Speeding Ticket $1,451
Accident $2,048
DUI $1,987

Credit Score

Your credit score can affect how much you pay for car insurance in Texas. If you have a good credit score, you can save money because you’ll likely get lower premiums.

For instance, if your credit score is excellent, you might pay around $1,023 per year, which is $255 less than someone with just a good credit score.

However, if your credit score is poor, you could end up paying a lot more. In fact, you might pay up to $1,066 more for your car insurance compared to someone with good credit.

Here’s a breakdown of the average car insurance rates in Texas based on credit score:

  • Excellent Credit Score: Around $1,023
  • Fair Credit Score: Approximately $1,596
  • Poor Credit Score: About $2,344

Car Type and Model

The type and model of your car can greatly affect how much you pay for insurance.

Cars that are worth a lot generally have higher premiums because fixing or replacing them costs more than regular cars.

Sports cars usually cost more to insure because they’re often involved in accidents.

Also, as cars get older, they tend to be cheaper to insure compared to newer ones because their value goes down over time.

Saving on Auto Insurance in Texas

Here are some tips to cut down on your car insurance costs in Texas:

  • Shop around and compare quotes from different insurance companies to find the best rates for your situation.
  • Bundle your car and home insurance policies with the same provider for potential discounts.
  • Look for discounts you might qualify for, like those for safe driving or being claim-free.
  • Consider raising your deductible, that is, the amount you pay out of pocket when you file a claim, to lower your premiums.
  • If you don’t drive much, explore pay-per-mile insurance plans, where you’re charged based on how many miles you drive annually.
  • Review your coverage and consider dropping unnecessary options, like comprehensive insurance, if it costs more than your car’s value or makes up a big portion of its worth. However, ensure you won’t be left underinsured before making any changes.

Frequently Asked Questions

Why is Auto Insurance Expensive in Texas?

Car insurance in Texas can cost more because of factors like crowded highways, high rates of car theft, fast speed limits, lots of people living in cities, and the risk of natural disasters.

These increase the chances of accidents, so insurers charge higher premiums to cover the risks.

How much does auto insurance usually cost in Texas?

On average, car insurance in Texas is around $1,316 per year, but the actual price can vary depending on your personal details and the insurance company you choose.

Why is my Texas Auto insurance so expensive?

Your Auto insurance in Texas might be expensive because of things like your driving history, credit score, age, or where you live in the state.

Is car insurance mandatory in Texas?

Yes, you have to have car insurance in Texas if you want to drive legally in the state.

What’s the minimum car insurance you need in Texas?

Texas requires all drivers to have liability insurance with at least $30,000 coverage per person for bodily injury, $60,000 per accident, and $25,000 for property damage.

Leave a Comment