To help you find the best car insurance for your needs, MoneyGeek ranked the top auto insurance companies in Texas based on customer satisfaction, affordability and more. Factors like age, location and driving record play a role in determining your auto premium, so shopping around and getting multiple quotes can help you save money and find the best coverage. MoneyGeek's ratings illustrate a potential savings of $1,960 when comparing car insurance costs from popular companies in Texas.
The Best Cheap Car Insurance in Texas for 2021
Dr. Mikhail Kouliavtsev
Dr. Daniel Perez Liston
Dr. Hwan Shin
Frank G. Cabano
Dr. Michael Kraten
J. Franklin Potts
Juan E. Gallardo
Ernest Jay Horn
Emilio M. D. López, Jr.
Dr. Sebastian Hohenberg
The Cheapest and Best Car Insurance in Texas
Generally, the cheapest car insurance in Texas is a policy that meets the state’s minimum liability coverage requirement. It’s the most affordable insurance, but we recommend getting higher levels of coverage for better and broader protection.
MoneyGeek found that the cheapest car insurance options for minimum coverage in Texas are from the following insurance providers:
- Farmers: $420 per year
- USAA: $424 per year (only available to current and former military members)
At an average rate of $1,317 per month, The General is the most expensive company in Texas for minimum liability car insurance.
Average Cost for Minimun Liability Coverage
These prices are only estimates based on rates for an average Texas driver and should not be used to compare insurance prices.
These prices are only estimates based on rates for an average Texas driver and should not be used to compare insurance prices.
A minimum coverage policy in Texas, which is the cheapest available option, only covers bodily injury and property damage liability. Drivers should consider a full coverage policy to cover damages to their own vehicles and have more protection against higher liability costs.
Some drivers prefer to have more protection and opt for a full coverage policy with comprehensive and collision insurance that covers most road and off-road accidents in Texas. While this policy has higher liability limits, it does cost more than a minimum coverage policy. It also covers expenses related to damages to the policyholder’s vehicle.
Based on average comprehensive and collision rates, the cheapest auto insurers in Texas are:
- Farmers: $821 per year
- USAA: $885 per year (only available to current and former military personnel)
The most expensive insurance company in Texas is The General, with an average annual rate of $2,718.
Average Comprehensive and Collision Rates in Texas
The prices stated above are estimated rates for the average driver in Texas and may differ from the rates you are able to get. These estimates are based on a policy with comprehensive and collision insurance with $100,000 for bodily injury liability per person, $300,000 for bodily injury liability per accident and $100,000 for property damage per accident.
The Best Car Insurance Companies in Texas for 2021
Based on MoneyGeek’s study, the best auto insurance providers in Texas for most drivers are:
- Best Overall: GEICO
- Runner-up: State Farm
USAA received the highest score in Texas by MoneyGeek's rating system. However, because USAA is only available to military members, veterans and their families, it is not listed as best overall.
MoneyGeek used various factors, including customer satisfaction, affordability, claims experience and financial strength, to determine the best car insurance companies in Texas.
To arrive at a score for each criterion, MoneyGeek assessed information from J.D. Power's U.S. Auto Insurance Study and AM Best's financial strength ratings, the industry standards for insurance company ratings and review. Along with unique pricing data, MoneyGeek ranked each study equally to formulate the final rating out of 100.
USAA is consistently among the most affordable options across the country, including Texas. It has high scores in financial stability and customer service but is only available for current and former military members.
USAA is among the cheapest and best auto insurance carriers in most states. That includes Texas, where it got a perfect score. Additionally, the insurance company offers unique features for qualified individuals. For instance, an active military member can enjoy a significant discount on their policy if they garage their vehicles on base.Read MoneyGeek's USAA auto Insurance Review
GEICO comes in second place based on its high scores across multiple categories. It is also the best option for Texans who do not qualify for a USAA policy.
Aside from a strong level of financial stability, GEICO offers convenience with its mobile app. Policyholders can easily track their policies and submit claims using the app. The online quote tool of the insurance company also gives drivers an easy way to get a policy rate and adjust coverages if necessary.Read MoneyGeek's GEICO auto Insurance Review
While USAA scores highly, this provider is only available to military members, veterans and their families.
List of the Largest Insurance Companies in Texas
The three largest insurance providers in Texas by market share are State Farm, GEICO and Allstate. Market share is measured by dividing the number of premiums an insurance company has written by the number of total premiums in the state. Providers with larger market shares tend to have higher financial stability, which means they can reimburse policyholders for legitimate claims.
- CompanyMarket Share
How to Compare Cheap Texas Car Insurance Quotes Online
To find the best auto insurance in Texas, you need to get personalized quotes from multiple providers. Most insurance companies have tools on their websites that let drivers get a reasonably accurate quote.
Make sure you use the same limits when shopping for quotes. For instance, if you get a quote for $50,000 in bodily liability insurance from one insurer, use the same limits when you get quotes from other insurers.
For easier access to an auto insurance quotes comparison, enter your ZIP code below. You can also use MoneyGeek’s price data to help choose which company websites to visit-
Overall, the cheapest companies in Texas are Farmers, USAA and State Farm. You can start searching for the best auto insurance by getting a personalized quote from these carriers.
What Is the Average Cost of Car Insurance in Texas?
Auto insurance premiums vary depending on many unique factors. MoneyGeek calculated the average rates for 100/300/100 comprehensive and collision insurance for a 40-year-old male driving a Toyota Camry with no record of tickets or accidents. Depending on your coverage level, location, driving history and age, your car insurance premium may be significantly higher or lower than these Texas averages.
- Average Driver: $1,316
- DUI: $1,987
- Speeding Ticket: $1,451
- Poor Credit Score: $2,360
- Seniors: $1,455
- Students: $3,257
Drivers with a DUI in Texas may have higher premiums than those who maintain a clean record. The average rate for a driver with a clean driving record in Texas is $1,316 annually. A DUI can increase this rate to $1,987.
The cheapest options for drivers with a DUI in Texas and full coverage policy are:
- Esurance: $1,149 per year
- Farmers: $1,207 per year
In comparison, Farmers offers the most affordable insurance for drivers with no record, while USAA comes in second.
Average Car Insurance Rates With a DUI
According to the Centers for Disease Control and Prevention, 13,592 people were killed in alcohol-related car crashes in Texas from 2009-2018. 2.2% of drivers in Texas say they have driven after drinking too much in the last 30 days.
Those convicted of a DUI in Texas face jail terms of 3 days to six months and a mandatory license suspension of 90 days to a year. There are also direct fines and fees of up to $2,000. If it's your second offense, that fine could go as high as $4,000. And if it's your third offense, or if there is a minor child in the car, your fine in Texas could run as high as $10,000.
Not only can having a DUI in Texas increase your car insurance rates, but you may also face jail time and fines. The real costs of a DUI can last for years in terms of insurance premiums, legal fees and education expenses and more.
Speeding tickets raise the average rate of auto insurance in Texas to $1,451 per year. That is $135 more than the annual average rate for the average Texas driver who has a clean record, which is $1,316.
Drivers with a speeding ticket may find the cheapest auto insurance from:
- State Farm: $924 per year
- USAA: $995 per year (only available to military members)
While Farmers has the cheapest car insurance for the average driver with full coverage and a clean driving record, State Farm and USAA both have lower rates for those with a speeding ticket.
Average Car Insurance Rates With a Ticket
Moving violations can negatively impact your auto insurance premiums. Distracted driving is dangerous and increases your odds of getting in an accident, making this infraction a major concern for insurers.
On average, annual car insurance premiums in Texas with a single conviction for speeding or distracted driving increase by $274.10.
Drivers with bad credit scores in Texas will likely pay higher car insurance rates. The average cost for drivers with good credit in Texas is $1,316 per year. Those who have poor credit may pay almost double the price, with the average rate at $2,360 per year.
The cheapest car insurance companies in Texas for drivers with poor credit are:
- Farmers: $1,269 per year
- USAA: $1,441 per year (only offered to military personnel)
Farmers and USAA are also the cheapest companies for those with good credit scores.
Average Car Insurance Rates for Drivers With Bad Credit
Many insurance companies note an increase in claims among people with poor credit scores. In fact, it was a 2003 University of Texas study commissioned by then-Lieutenant Governor Bill Ratliff that established a significant inverse correlation between credit scores and claims for the insurance industry.
Texas is among the states that allow insurers to use credit scores as one factor to set premiums. With an average credit score of 680 according to Experian, Texans rank 48th in the nation for good credit, which means that many may be paying more for auto insurance.
If your credit score has been negatively affected because of identity theft or a specific life event beyond your ordinary control, you may qualify for an exception to credit underwriting. Examples include job loss, divorce, the death of an immediate family member and the like. To request an exemption, simply submit the request to the insurance company in writing, along with documentation.
Once the carrier has your request, documentation and the request meets state requirements, the carrier can only consider credit information not related to the negative life event, or they must assign a neutral credit score.
If you believe your request for a credit underwriting exception was improperly denied, you can visit the Texas Department of Insurance Complaint Process web page to file a complaint.
Senior drivers in Texas will likely pay slightly more for their car insurance. The average cost of auto insurance in Texas for senior drivers is $1,455 per year. That is higher than the annual average rate of $1,316 for the average driver.
The cheapest options for senior drivers in Texas are:
- Farmers: $834 per year
- State Farm: $891 per year
This differs slightly from the cheapest companies for the average 40-year-old driver in Texas, Farmers and USAA.
Average Car Insurance Rates for Seniors
In Texas, older drivers are subject to increased safety laws and regulations. In 2017, 9.9% of fatal car crashes in Texas were caused by drivers over the age of 65.
According to the Texas Department of Public Safety, drivers between the ages of 79 and 84 must renew their license in person every six years, while drivers aged 85 and older are required to renew every two years.
Senior drivers are not only required to participate in more regular license renewals and screenings, but they often pay higher insurance rates in Texas. But not all companies start increasing premiums at the same age. Some hike rates at age 65, while others wait until age 70 or even later. As you age, it pays to shop around every few years for affordable car insurance for seniors.
If you're an older driver, you may be able to offset some or all of the higher premiums in several ways, including taking a defensive driving course. You may be able to get discounts if you take a defensive driving course. Details vary depending on your carrier. Approved courses include Defensive Driving by the National Safety Council, American Safety Council or IMPROV.
Since student drivers in Texas are inexperienced and riskier to insure, their premiums are typically higher. For student drivers, the average cost of auto insurance in Texas is $3,257 per year. In comparison, that is more than twice the $1,316 annual average rate for the average driver in the state.
The cheapest car insurance companies in Texas for student drivers are:
- State Farm: $2,512 per year
- GEICO: $2,740 per year
In comparison, the two most affordable insurance carriers for an average driver who is 40 years old are Farmers and USAA.
Average Car Insurance Rates for Students
Younger drivers, including high school and college-aged drivers, are considered a higher-risk group. Teen drivers are particularly accident-prone and insurance rates reflect this.
However, some carriers are friendlier than others when it comes to setting rates for drivers in their teens and early 20s. Rates for this group vary substantially. It pays to shop around, especially right before a teen driver goes to college or owns his or her first car.
If you're a parent or guardian, you should also explore adding your child to your insurance policy as an additional driver, rather than having them get their own separate policy. Whether you are a parent of a young driver or you're a young driver buying your own coverage, you may be able to get a break on your premiums.
Maintain a safe driving record, protect and improve your credit score and drive a vehicle with safety features installed. Stick to sensible sedans, SUVs, vans and trucks since these are cheaper to insure than sports cars.
You may also get a discount for bundling multiple policies within your family at the same company.
Increasing your deductible is another good way of saving money on premiums as long as you can afford the deductible if you have a claim.
If you're a Texan going to school in another state and taking your car with you, notify your insurance company as soon as possible. The agent can help you be sure that your policy matches the insurance requirements of your new state.
The Problem of Distracted Teen Driving
In 2018, there were more than 540,000 car accidents on Texas roadways, with 95,572 of them about 18% attributable to distracted driving, according to the Texas Department of Transportation. These are accidents that are due to things like texting while driving, cell phone use, etc. These distracted driving-related accidents were responsible for 394 deaths and 2,340 serious injuries.
Distracted driving is such a problem among young Texans that the Texas Department of Safety created an eight-part video about it. Called IMPACT Texas Teen Drivers (ITTD), the series explores the dangers of distracted driving through real-life stories of teens who died from texting, talking on cell phones and otherwise multitasking while driving. "It's not about bad kids doing bad things, but about good kids making poor choices," the department states. It's now a required part of every driver's education class for teens in Texas.
The insurance department also reminds drivers that some policies require all covered drivers to be named on the policy, so tell your insurance agent as soon as your child turns 16. Otherwise, the TDI warns, "if you don't have all the drivers in your family listed on the policy and the company learns about them later because of an accident claim, for instance the company may bill you for the extra premium you should have paid, deny your claim and coverage, or refuse to renew your policy in the future."
Premium Comparison by Student Type
No matter how much your teen or college student wants a sports car, insurers advise you to just say no. Sedans or minivans are a safer choice and your annual premiums will likely be much lower.
Insurance Rate Information for Military Drivers and Veterans
Average Rates for Texas service members
Car Insurance in Texas: What You Need to Know
If you own or operate a motor vehicle in Texas, you need to show that you are financially capable of covering any damage you may cause. State law requires that insurance must be carried for all vehicles (except semi-trailers and trailers) registered for on-road use.
The Texas Transportation Code outlines one exception to the rule: You can avoid the requirement for insurance if you deposit at least $55,000 in cash or eligible securities with the Texas Comptroller or a cashier’s check with the county judge.
Proof of Insurance in Texas
Drivers in the state must provide proof of insurance or alternative documentation. According to the Texas Department of Motor Vehicles, you need to show proof of insurance in several circumstances:
- When asked for it by a police officer
- When involved in a car accident
- When registering and renewing a vehicle registration
- When applying for and renewing a driver's license
Auto insurers are required to send policyholders an insurance card. Individuals relying on insurance alternatives will receive certificates in lieu of an insurance card. You can carry your card on your smartphone.
Minimum Liability Insurance Requirements in Texas
Drivers in Texas are required to post a $55,000 bond or purchase liability insurance. Collision and comprehensive coverage are optional unless you financed the car, in which case the lender will probably require such coverage as a condition of the loan. But even if you own the car outright, liability coverage is a must. The minimum mandatory coverage limits outlined by the Texas Department of Insurance are:
- $30,000 for each injured person
- $60,000 for injuries per accident
- $25,000 for property damage per accident
A policy with this minimum level of insurance is called 30/60/25 coverage.
Note that these are just the state minimums. When cars and medical care are both getting more expensive, the minimum amount may not be enough to cover the entire cost of the accident. Most insurance and consumer groups recommend drivers carry 100/300/100 coverage instead of the state's minimum liability coverage.
High-Risk Auto Insurance Program in Texas
Individuals who don't qualify for liability insurance through traditional channels may obtain coverage through the Texas Automobile Insurance Plan Association. To qualify, applicants must meet these requirements:
- Have a valid driver's license
- Be a resident of Texas or have a vehicle registered in Texas
- Certify that two or more companies have denied insurance coverage within the past 60 days
Alternatives to Insurance in Texas
Under Texas law, uninsured residents may legally drive if they can present proof of financial responsibility. According to the Texas Transportation Code, approved alternatives to car insurance in Texas include:
- $55,000 cash or securities deposit with the state comptroller
- $55,000 cash or cashier's check deposit with the county judge
- Surety bond filed with the Texas Department of Public Safety
In each instance, drivers who opt for this alternative must carry a certificate of deposit or a surety bond deposit instead of an insurance card.
What Happens If You Don't Have Car Insurance in Texas?
Research presented by the National Association of Insurance Commissioners shows that most uninsured motorists do not have car insurance because they cannot afford it (or, in the case of illegal immigrants, are not allowed to buy it). Texas assesses stiff penalties on uninsured motorists. Drivers caught without insurance or a valid alternative can face the following consequences:
- First offense: $175–$350 fine
- Second offense: $350–$1,000 fine, a two-year suspension of driver's license and car impoundment
- Driving without a license: Up to $2,000 fine and/or 180 days in jail
Texas has also launched TexasSure, an automated database that identifies drivers who do not have mandatory insurance coverage. This program notifies drivers who allow their coverage to lapse.
How Much Coverage Do You Need in Texas?
While Texas only requires 30/60/25 minimum liability coverage, many drivers should consider buying insurance that goes beyond the minimum levels of protection. A 100/300 liability policy, one that covers $100,000 for a single person in an accident and $300,000 for all individuals in an accident, is much more likely to protect you if you cause an accident with severe injuries or damages to the other driver or vehicle. If you have a newer vehicle or your car is not yet paid for, it’s also a good idea to carry comprehensive and collision coverage to cover damage to your vehicle.
Insurance companies in the state offer a Texas Personal Automobile Policy, a standardized policy that offers eight types of insurance in one policy. But because exclusions vary from policy to policy, the Texas Office of Public Insurance Counsel recommends drivers know exactly who and what is covered.
Average Insurance Rate by City in Texas
FAQs About Car Insurance in Texas
For many Texas drivers, price and which insurance company is the best are the most pressing questions they consider when looking for auto insurance.
Expert Advice on Finding Cheap Car Insurance in Texas
To help you find trustworthy and accurate information on car insurance in Texas, MoneyGeek received expert advice from proven professionals. The perspectives and opinions expressed are those of the individual contributor.
- What are the key factors drivers in Texas should look for when searching for the best auto insurance coverage?
- What steps can drivers in Texas take to find affordable car insurance?
- How do regulations and rules in Texas impact insurance pricing and how consumers might shop for coverage?
Department Chair and Professor of Economics and Finance at Stephen F. Austin State University
Director, Consumer Law Center at the University of Houston, Professor Emeritus
Associate Professor of Finance at the University of St. Thomas-Houston
Associate Professor of Finance at The University of Texas at Tyler
Assistant Professor, Marketing and Management at The University of Texas at El Paso
Professor of Accounting at Houston Baptist University
Senior Lecturer Department of Marketing and Management at the University of Texas at El Paso
State Farm Insurance Agent/Owner
Associate Professor of Finance at Houston Baptist University
Associate Professor of Marketing at Trinity University
Instructor of Finance and Management at West Texas A&M University
Associate Professor of Marketing at Wayland Baptist University
Professor of Finance at the University of Houston-Victoria
Associate Professor & MBA Program Director in the Satish & Yasmin Gupta College of Business at the University of Dallas
Lecturer — School of Family & Consumer Sciences at Texas State University
Professor of Business at Dallas College
Associate Professor - Finance, Insurance & Real Estate at Baylor University
Assistant Professor of Marketing at McCombs School of Business, The University of Texas at Austin
About the Author
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- Texas Department of Public Safety. "Drivers Age 79 or Older." Accessed January 27, 2021.