Average Cost of Auto Insurance in Texas

Texas is second only to California in the number of licensed drivers on its highways, at almost 13.5 million. California is the winner, with over 22.6 million drivers. Texans like to joke that turn signals give drivers clues as to your next move, and that “real” Texas drivers do not use them. With so many drivers on the road, the reality may not be if, but when, you will be involved in a traffic accident. Surprisingly, even with so many drivers, the average Texas auto insurance rates are actually reasonable.

Texas — Minimum Insurance Requirements

Each state has different minimum auto insurance requirements. Most require only liability coverage; Texas liability insurance requirements are 30/60/25. This is a shorthand way of saying you need liability insurance providing coverage limits of at least $30,000 for each person and $60,000 per accident for injuries, and $25,000 coverage for damage to property.

Coverage limits signify the highest amount an insurance company will pay out, regardless of the actual expense. The state of Texas does not endorse the minimum limits as adequate — you may need to assess your own situation and ability to pay for accident costs that exceed your insurance limits. Because of ever-increasing costs of medical care, some experts recommend 100/300/100 as a more protective level of liability coverage.

Additional Coverage Types

To adequately protect yourself, you may want to consider other types of auto insurance besides the basic liability coverage. Liability insurance pays for damage or injuries you cause to someone else, but does not provide money for you to repair your own car or cover your medical costs. Collision insurance pays for damage to your vehicle if you collide with another car or object.

Comprehensive coverage takes care of everything else – if your car sustains damage in a tornado, flood, fire or hailstorm it’s covered. Comprehensive also covers damage from hitting a deer in the road or from vandalism. Personal Injury Protection, or PIP insurance, covers your medical costs in an accident but is not necessary if you have a good health insurance policy from your employer.

Average Car Insurance in Texas

According to CarInsurance.com’s ongoing study of insurance rates by state, in 2011 Texans are paying $1,287 per year for auto insurance on average. This figure represents the cost of full coverage — meaning comprehensive, collision and liability insurance coverage. This compares to a national annual premium average of $1,436 for 2011. Auto insurance trends have been heading down over the last three years for most states, including Texas. In 2009, the average rate was $1,809. The average fell to $1,518 in 2010.

The Texas Department of Insurance provides a tool for state residents to get an idea of the cost of the liability component of auto insurance based on different zip codes, credit ratings, marital status, age, driving record and other factors that insurers consider when pricing insurance policies. The tool, located at the state-sponsored HelpInsure.com, allows you to enter your information and get an idea of what average auto insurance liability coverage might cost you.

For example, we entered the following characteristics — a male, married driver living in Houston, zip code 75844, age between 25 to 65, with good credit. Our prototype driver selected liability coverage limits of 100/300/100. He drives a 2007 Ford F150 truck, to and from work, and has a clean driving record. The tool return sample insurance rates from 42 different insurance companies and includes the insurer’s credit rating and a complaint index, representing how many consumer complaints the company has received.

Additionally, the tool shows the insurance companies’ rate change trends over the last three years, by year. For our hypothetical driver, the lowest rate came from Fireman’s Fund Insurance Company, with an annual cost of $256, an “A” credit rating and a zero for the complaint index. This number represents strictly liability coverage; adding comprehensive, collision and any other types of coverage will increase the rate.

Finding the Best Insurance

Most of us are not independently wealthy, and there are better things to do with your money than paying more than you need to for auto insurance. Everyone has a unique combination of factors considered by insurers, so you could get substantially different rates than your neighbors or extended family members. Additionally, each insurance company uses its own “secret” methods for calculating risk and weighting certain factors more than others.

This means you might find dramatically cheaper rates, just by getting a few quotes. It’s a good idea to get quotes every six months. Imagine if you were still paying the 2009 average of $1,809 today, even though in 2011 other Texans are paying an average of $1,287 per year. That savings is a new iPad, and all you need to do is request a few quotes to find cheaper rates. The best part is that quotes are so easy to get now. Just enter your zip code on our website and you can have quotes to compare in about 10 minutes.

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