From Dallas to Houston, Amarillo to El Paso, Texas is a state with more than 310,000 miles of open, public roadways. Some stretches, such as the one between Williamson and Travis County, allow drivers to hit 85 on the speedometer. Read on to find out what kind of car insurance you need in the Lone Star State.
What Does Texas Require for Vehicle Insurance?
Texas has one of the country’s highest rates of drivers who lack insurance. In fact, according to Texas Department of Insurance, one out of every five cars and trucks in the state is uninsured. To protect themselves, Texans are paying approximately $1 billion in voluntary insurance every year to cover the cost of accidents with an uninsured driver.
Who Needs Vehicle Insurance in Texas?
All drivers, except those who choose to put down a hefty bond in lieu of insurance. State law requires that insurance must be carried for all vehicles (except semi-trailers and trailers) that are registered for on-road use.
Proof of Insurance in Texas
Drivers in the state must provide proof of insurance or alternative documentation (see below). According to the Texas Department of Motor Vehicles, you are required 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 policy holders an insurance card. Individuals relying on insurance alternatives will receive certificates in lieu of an insurance card. As of 2013, it’s legal for drivers to carry their insurance card on their smartphone.
Minimum Liability Insurance Requirements in Texas
All drivers in Texas are required to purchase and carry liability insurance. The minimum limits are:
- $30,000 for each injured person per accident
- Up to a total of $60,000 per accident
- $25,500 for property damage per accident
At a time 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 up to 10 times the state’s minimum in liability coverage (See: How Much Car Insurance Coverage Do I Need? below).
High-Risk Auto Insurance Program in Texas
Individuals who don’t qualify for liability insurance through traditional channels may be able to 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 insurance coverage has been denied by two insurance companies 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:
- A $55,000 cash or securities deposit with the state comptroller
- A $55,000 cash or cashier’s check deposit with the county judge
- A surety bond filed with 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 in lieu of an insurance card.
What Happens If You Don’t Have Car Insurance in Texas?
Although research shows most uninsured motorists do not have car insurance because they cannot afford it (or, in the case of undocumented workers, are not allowed to buy it), Texas slaps uninsured motorists with stiff penalties. Motorists caught without insurance or a valid alternative can face the following consequences:
- First offense: $175 to $350 fine
- Second offense: $350 to $1,000, two-year suspension of driver’s license and car impoundment
- Driving without insurance or a driver’s license: Up to $2,000 fine and/or 180 days in jail
- Driving without insurance and causing serious injury or death: Up to a $4,000 fine and/or 12 months 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 have allowed their coverage to lapse.
How Much Vehicle Insurance Do You Need in Texas?
Many drivers should strongly 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 individuals in an accident, will be much more likely to protect you, according to the Insurance Information Institute.
Texas Lack Vehicle Insurance? 13.3% National Average: 12.6 %
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.
It’s also good to check up on the insurance company you’re dealing with. The Texas Insurance Department advises you to find out about a company’s license, history of complaints and financial rating by calling TDI’s Consumer Help Line at 1-800-252-3439. Or, visit the website at www.tdi.texas.gov.
For more on the basics of buying car insurance, see MoneyGeek’s guidebook on the topic.
Teen Drivers in Texas
Distracted driving is such a problem among teen drivers 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 ed class for teens in Texas.
Because teens are at high risk of accidents, expect your premiums to go up, too. The Texas Department of Insurance (TDI) reports it’s cheaper to add your child to your policy, though, than to get a new one.
The insurance department also reminds drivers that some policies require all covered drivers to be named on the policy, so to 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.”
Texas Car Insurance: How Much a Teen Driver Will Cost You
Median annual price change for families with a teen driver on their policy:$1,969 increase This is a difference of 130%.
Average annual premium increase if your teen gets a speeding ticket while driving 11-15 mph over the speed limit:
Potential Discounts for Teens in Texas
Impact on annual premium with Good Student and Defensive Driving discounts:$522 saved
A Look at Premiums from Texas Insurance Providers
Look for savings by comparing annual average premiums for a married couple and a 16-year-old teen driver in Texas. Here are 5 of the leading Texas providers.
Mustang? Minivan? How Car Models Affect Your Policy
No matter how much your teen wants a sports car, insurers advise you to just say no. Sedans and minivans are a safer choice, and your annual premiums will likely be much lower.
Average premium for two 2014
Average premium for two 2008
Town and Country Limiteds
Annual benefit of minivans:
College Drivers in Texas
If you’re moving to Texas to go to school, you have 30 days to register your car and 90 days to get a Texas driver’s license. As the Texas DMV site says, “Welcome to the Lone Star State! In no time at all, we’ll be proud to call you a registered Texan.”
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.
Cheaper Premiums for College vs. High School Drivers
Median premium change with a college student vs. high school driver$787 decrease This is a savings of 21%.
Compare Premiums of 5 Leading Texas Providers
Every year, review your policy before it renews to see whether you could get a better deal with another provider. The average premiums for a married couple with a 19-year-old college student in Texas, for example, vary greatly.
Texas College Drivers: A Long-Distance Discount
You may pay a smaller family premium if your child lives 150 miles or more away from home.
Average premium for a 19-year-old male
- $4,041 at home
- $3,471 at school
- $570 in savings
Average premium for a 19-year-old female
- $3,606 at home
- $3,158 at school
- $448 in savings
Texas College Students: A Sports Car May Cost You
Your college student will pay a lower premium to drive a minivan than if he or she drives a sports car, since insurers consider minivans less risky.
2014 Mustang GTs (2)$4,907
2008 Town and Country Limited minivans (2)$2,796
Annual benefit of minivans
Military Drivers in Texas
Texas has more than 124,000 active duty personnel and more than 1,680,000 veterans. Vets living in the Lone Star State may be eligible for military discounts on regular auto insurance, or they can buy a policy at a reduced rate from a company that works exclusively with past and present military personnel. Shop around for the best rates available to veterans, bearing in mind that a military discount also requires a good driving record.
Active-duty soldiers leaving Texas temporarily should check with their insurance company before they deploy to find out if they still have to pay premiums on vehicles in storage. Some companies allow veterans to suspend their auto insurance coverage while a vehicle is not in use.
Disabled veterans registering their vehicles with the Texas DMV are eligible for a free driver’s license and reduced-price license plates. Texas law also permits disabled vets to travel on toll roads without charge.
Texas Service Members:
How Vehicle Choice Affects Your Premium
In general, premiums are lower for a mini-van or sedan than for SUVs (associated with rollover crashes) or sports cars (associated with speeding), according to the Insurance Information Institute. However, in Texas an older model SUV trumps a recent model sports car in terms of premium savings.
Comparison of Premium Ranges by Driver Age and Vehicle for a Military Driver
Age Savings for Texas
Median auto insurance
for service members:
Compare Average Premiums Available to Texas Military Personnel
It pays to do some comparison shopping. Check out the average annual rates you can get in Texas.
Seniors in Texas
Texas does not require insurers to offer a discount on car insurance to seniors who take a defensive driving class. However, most insurers will give you a discount for doing so. Check with your insurance agent about the best course to take.
Undocumented Workers in Texas
Currently, Texas does not permit all undocumented immigrants to hold a driver’s license. Although state legislature bills have been introduced over the last five years to allow undocumented immigrants to obtain a license and/or purchase insurance, none has been successful.
Immigrants who arrived in the United States as children, however, may be able to get a driver’s license through the federal Deferred Action for Childhood Arrivals program, which would qualify them for work permits and insurance as well. Texas allows DREAMers (as recipients of DACA are called) who receive work permits to get drivers licenses.
Ridesharing Companies and Insurance in Texas
The increasing popularity of ridesharing companies, including Uber and Lyft, has raised important questions about driver and passenger protections. Transportation network companies such as Uber often provide commercial liability insurance to drivers when their app is on and a passenger is in the car. But what about when the driver’s hailing app is on and no one is in the car? Since insurers will typically not cover an accident on a personal policy if you’re “driving for hire,” drivers may be at risk. The Texas legislature recently passed a law to address this gap.
As of Jan. 1, 2016, TNC drivers are required to have an additional liability coverage beyond their basic state-mandated liability insurance. When they aren’t giving a ride, TNC drivers must have a 50/100/25 policy: $50,000 for bodily injury/death, $100,000 for each accident and $25,000 for property damage. When driving a passenger, the company must provide at least $1 million in commercial insurance.
At least nine insurance companies offer ridesharing policies in Texas, according to the Texas Department of Insurance.
Car Accidents in Texas: How to File a Claim
If you’re involved in a car accident, you may feel too rattled to think straight. But it’s important to exchange insurance information with the other driver, including the complete name of the insurance company and policy number.
If the driver fails to provide information or gives you a fake name, the Texas Department of Motor Vehicles recommends asking for a copy of the police accident report. This may contain the other driver’s name and insurance company information.
Follow the checklist below to file an auto insurance claim in Texas.
- Contact your insurance company as soon as possible to report the accident and start the claim process
- Provide the insurance agent the names, phone numbers and addresses of the other driver and any witnesses
- Follow the company’s claims process instructions, including scheduling an adjuster and receiving vehicle repair estimates
- Submit a written report to the insurance company after making a claim by phone; this helps guarantee protection under Texas’ law of prompt insurance claim payments
- Send accident reports and any legal documentation about the accident to the insurance company
- Submit a proof-of-loss form (if required)
Under Texas law, insurance companies must accept or reject a claim within 15 days. Insurance companies that are unable to meet these deadlines must send you a notice of explanation before receiving an additional 45 days to approve or reject the insurance claim. If the claim is approved, the insurance company has five days to make the payment.
It’s important to note the prompt payment law does not apply if the other driver’s insurance is paying for the claim.
Driver Safety: How Does Texas Rank?
Texas is home to the some of the most dangerous roads in the country, according to data from the National Highway Traffic Safety Administration (NHTSA). About 40 percent of all fatal traffic accidents in 2013 involved a legally drunk driver, according to NHTSA data.
“While the Texas transportation department does everything it can to provide safe roads and bridges, we cannot control individual driving behaviors that not only affect the lives of drivers themselves, but also the lives of others who share the road,” says DOT spokesman David Glessner of the Texas Department of Transportation. “For this reason, we place a high priority on safety awareness campaigns throughout the year.” Among these are “Drink. Drive. Go to Jail” advertising campaigns across web sites, billboards, television and radio. Texas law enforcement mount regular speed-enforcement efforts and sobriety checkpoints, Glessner says, with the additional goal of ticketing drivers who don’t buckle up.
Below is the overall ranking of Texas in terms of driver safety.
Texas Driver Safety Ranking
The driver safety table shows the different safety factors that contribute to your state's overall safety rank (in the green box). The overall safety ranking and the National Ranking column scores in each category (including crash fatality rates) are from safest to most dangerous, with 1st being the safest and 51st the least safe.
How did we create the safety rankings?
We created a traffic safety ranking of all US states plus the District of Columbia by combining data from the National Highway Traffic Safety Administration and the Insurance Institute for Highway Safety. We looked at fatality rates by distance traveled as well as by population and gave more weight to behaviors that were riskier and preventable (i.e., drunk driving, not using a seat belt), as well as to accidents that involved more than one party (i.e., multi-vehicle).
|Driver Safety Profile||Number of Fatalities||Fatality Rate
The fatality rate is the rate per one billion vehicle miles traveled, except for pedestrian and bicyclist fatality measures, which are per measured per a population of 100,000.
Rankings are in order of safest to least safe. A state with the lowest fatality rate would be the safest, and thus ranked #1.
|Drunk Driving-Related Fatalities||1,353||5.53||48th|
|Passenger Vehicle Unrestrained Fatalities||900||3.68||27th|
|Unhelmeted Motorcycle Fatalities||279||1.14||40th|
|Multiple Vehicle Fatalities||1,608||6.58||48th|
|Total Vehicle Fatalities||3,382||13.83||40th|
Sources: National Highway Traffic Safety Administration, Insurance Institute for Highway Safety
Texas: Protecting You from Injury on the Road
“Safety is our No. 1 priority,” says DOT spokesman Glessner. “With our recent population boom putting more drivers on our 80,000 miles of state-maintained roadways, there is an ongoing need to educate all drivers about the dangers of drinking and driving, distracted driving and other unsafe behaviors.”
Safe Driving Laws in Texas
|Mandatory seat belts||All drivers and passengers must use proper vehicle restraints. Fines run up to $250 for each ticketed incident.|
|Child passenger safety||<8 years of age and <4'9" in height must be secured in an appropriate child safety passenger seat; >8 may use safety belt, regardless of height|
|Driving under the influence (DUI)||
First Offense: Fine of $2,000; 3-180 days in jail; suspension of driver’s license for up to one year; annual fee of $1,000 to $2,000 for three years to maintain license
Second Offense: Fine up to $4,000; 1-12 months in jail; suspension of driver’s license for up to two years; annual fee of $1,000 to $2,000 for three years to maintain driver’s license
Third Offense: $10,000 fine; 2-10 years in prison; suspension of driver’s license for up to 2 years; annual fee of $1,000 to $2,000 for three years to retain driver’s license
|Ignition interlock after DUI||After two or more driving under the influence convictions in a 5-year period, a special ignition switch must be installed|
|Talking on cell or texting while driving||Partial||No statewide ban on the use of cell phones while driving is currently in place, although 40 cities have banned texting while driving. Learning permit drivers cannot use cell phones during their first six months of driving, and drivers under 18 cannot use cell phones while driving. In school zones, all drivers are prohibited from using cell phones or texting while driving. Fines range from $200 to $500|
|Protections for young drivers||<18 drivers may not drive between the hours of midnight and 5 a.m.; may not carry more than one passenger under the age of 21; may not drive while using a cell phone. Full driving privilege age at 18|
|Motorcycle helmet law||Partial||<21 riders must wear a helmet, as well as operators and passengers who have no medical insurance and who have not completed a safety course|
|Bicycle helmet law||No statewide bicycle helmet regulations|
Car Insurance Resources for Texas Residents
Created by the Texas Department of Insurance, the Texas Automobile Insurance Plan Association offers insurance to high-risk drivers who have been turned away by other insurers.
The department has a robust consumer Q and A section.
The Texas DMV is responsible for vehicle registration process in Texas.
The DPS manages driver’s license registration process in Texas.
The Texas Department of Insurance offers an online portal for filing an auto insurance complaint.
The Texas Office of Public Insurance Counsel represents consumers in auto insurance issues. It promotes fairness in the market, makes policies more transparent and helps protect the rights of consumers.