Auto insurance is an important purchase, but finding a policy and insurer that suit your needs isn’t always easy. Here you’ll find everything you need to know about buying a Texas auto insurance policy — including how much coverage is required, what your policy will pay for and where to find cheap car insurance in Texas.
We looked at quotes from the largest insurers in Texas and ranked the three cheapest options for these driver groups:
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» FIND YOUR MATCH: Who’s the cheapest carrier for you?
Cheapest for good drivers
For drivers with no at-fault accidents, DUIs or moving violations.
The average for good drivers in Texas among the three cheapest insurers was about $1,204. Farmers Insurance was the cheapest at $994 per year, or about $83 per month.
In addition to enjoying lower rates in general, safe drivers typically can get a variety of discounts. State Farm, in particular, advertises four separate discounts on its site for safe or accident-free driving.
Cheapest for young drivers
For drivers in their early 20s.
Young drivers often need less car insurance than those with savings and assets, so we looked at rates for drivers in their early 20’s with minimum required coverage. Farmers returned the lowest rate, at about $63 per month, followed by Geico and State Farm.
This category had the lowest-priced range of average rates of any we analyzed, meaning young drivers can often keep costs fairly low.
Cheapest for drivers with one at-fault accident
Causing one accident can add a significant amount to your Texas car insurance premium, but insurers vary in how much they increase rates. One insurer in this test returned a rate of more than $8,000 per year for drivers with one at-fault crash, showing the value of shopping around for the best rate.
Cheapest for drivers with poor credit
For drivers placed in the “poor credit” tier.
Even though you may not associate your credit with car insurance, credit-based insurance scores are one of the factors companies can use to help determine your rates in Texas.
In some cases it won’t affect your rates, such as with Farmers Insurance in our analysis. But not everyone can count on their premiums staying put. Geico and State Farm were the next cheapest insurers for drivers with poor credit, and each company’s rates jumped for this group. As always, comparing a variety of estimates is a good way to find the best deal.
Cheapest for retired drivers
For drivers in their mid- to late 60s who no longer use their car for commuting.
Older drivers might anticipate rising auto insurance rates as they age. But our research found that the lowest average rate for retired drivers in Texas — $774 per year from Farmers — was cheaper than the best deal for 30-year-old good drivers.
The biggest reason for this price difference is that retired drivers usually travel significantly fewer miles per year than those who commute daily. To reflect this, we looked at rates for older drivers who drive half as much as other groups.
Cheapest for drivers with a military connection
If you’re an active member of the military or a veteran — or have an immediate family member who is — chances are high you’ll get a good rate with USAA, an option that isn’t available to the general public. In our analysis, USAA was one of the three cheapest options in Texas for every driver type listed above, and in some cases it was the cheapest. USAA customers also benefit from the insurer’s top-rated customer service.
» COMPARE: NerdWallet’s car insurance comparison tool
Cheapest for low-mileage drivers
If you don’t drive much, look into Milewise when you compare quotes. This insurance from the Allstate family requires a device to plug into your car to track mileage. You’re charged a daily rate plus a per-mile rate, and the company says customers who drive 135 miles or less per week can save 10% or more. As with other per-mile insurers, the less you drive, the lower your insurance bill. But if you want to take a road trip, don’t worry — you won’t be charged for more than 150 miles per day.
Minimum state car insurance requirements in Texas
With rare exceptions (see below), Texas drivers are required to carry liability insurance. You’ll often see the minimum requirements written in shorthand as 30/60/25. This means in Texas you must buy at least:
- $30,000 bodily injury/death liability coverage per person
- $60,000 bodily injury/death liability coverage per accident
- $25,000 property damage liability coverage per accident
If you cause an accident, liability insurance kicks in to pay for others’ injury treatment and property damage, up to your limits. It doesn’t pay for your own injuries or vehicle repairs.
In many cases, the legal minimum insurance won’t be enough to cover costs if you cause an accident. If you total someone’s luxury car, for example, their repair costs could easily exceed a $25,000 ceiling. Any damage that surpasses your limits has to come out of your own pocket. That’s why for most drivers it’s wise to select higher limits, such as 100/300/50.
Other insurance to consider
Collision coverage: Pays for fixing your own car. It also pays for repairs if you have a single-car accident, such as hitting a tree. Collision coverage has a deductible, the amount subtracted from a claim payment. So if you need $5,000 worth of repairs and have a $500 deductible, your claim check would be $4,500.
Comprehensive coverage: Comprehensive coverage pays to repair your car after animal collisions and certain non-collision issues such as car theft, vandalism and fire, to name a few. It also has a deductible.
Uninsured/underinsured motorist coverage: If you’re struck by a driver who has no car insurance, or not enough, UM/UIM coverage will pay for your injury treatment and that of your passengers, as well as your auto repairs. There’s a mandatory $250 deductible for UM/UIM property-damage claims in Texas.
Texas auto insurance companies must offer UM/UIM coverage, but you can reject it in writing if you wish. However, it could be a worthwhile purchase, since about 14% of Texans drive uninsured, according to the Insurance Research Council. It’s common to select the same limits as your liability insurance.
Medical payments coverage (MedPay): MedPay helps pay for your injury treatment plus that of your passengers or family members no matter who caused the accident. It also helps cover funeral costs after fatal accidents.
Personal injury protection: Like MedPay, PIP pays for injury and funeral costs for you, your family and your passengers after an accident, regardless of who caused the accident. It also covers partial income losses due to injuries. Texas car insurance companies will automatically offer $2,500 in PIP, but you may reject it in writing if you don’t want it, or you can select higher limits.
Alternatives to buying auto insurance in Texas
If you’re having trouble getting insured in Texas, look into the Texas Auto Insurance Plan Association. It can help connect you with a company that will cover you.
You don’t necessarily have to buy car insurance in Texas. There are legally acceptable alternatives you can choose to prove your financial responsibility, including:
- Filing a surety bond with the Department of Public Safety. You must file the bond jointly with at least two people, called “sureties,” who own property in the state. The property offered in the bond must be worth at least as much as the insurance amounts mandated under the state’s minimum liability car insurance requirements.
- Making a $55,000 deposit with the state comptroller in either cash or securities.
- Making a $55,000 deposit with the county judge where your vehicle is registered, in either cash or cashier’s check.
- Qualifying for a certificate of self-insurance through the Department of Public Safety. You promise to pay up to the same amount covered by minimum liability insurance requirements if you cause an accident with one of your cars. This option only applies if you own 25 vehicles or more.
Cheapest car insurance in Texas
|Drivers with one at-fault crash||Farmers|
|Drivers with poor credit||Farmers|
|Drivers with a military connection||USAA|
For most categories, NerdWallet averaged rates from the largest insurers for 30-year-old men and women in 10 ZIP codes and with the following coverage limits:
- $100,000 bodily injury liability coverage per person
- $300,000 bodily injury liability coverage per crash
- $50,000 property damage liability coverage per crash
- $100,000 uninsured motorist bodily injury coverage per person
- $300,000 uninsured motorist bodily injury coverage per crash
- Collision coverage with $1,000 deductible
- Comprehensive coverage with $1,000 deductible
We used a 2014 Toyota Camry in all cases. Our sample retired driver was age 67 and drove 50% fewer annual miles than other groups. Our sample young driver was age 22 and carried the minimum required coverage. These are sample rates generated through Quadrant Information Services. Your own rates will be different.