Why Is Car Insurance so Expensive in Texas?

The average cost of auto insurance in Texas is $1,316 per year, lower than the national average of $1,424 yearly. Rates for car insurance in Texas can be more expensive depending on your driver profile and state-specific factors,

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Last Updated: 6/24/2022
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Texas car insurance premiums are cheaper than the national average national rate but can be costly for you, depending on your profile. If you are wondering why car insurance is expensive in Texas, it could be due to factors including your age or driving record.

The cost of full coverage car insurance in Texas may also be impacted by state-specific factors like the rates of car thefts, high speed limits and highway density.

MoneyGeek broke down the factors that affect the cost of car insurance in Texas. Our sample driver profile is a 40-year-old with a full coverage policy and a clean driving record.

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Key Takeaways

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In Texas, the average driver pays lower rates than the national average for car insurance.

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However, due to state-specific factors like a large urban population, or personal factors like driving record, age or credit scores, you may find car insurance in Texas is expensive.

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Depending on your profile, you can find ways to save on your car insurance premiums.

Why Texas’ Car Insurance Rates Can Be High

Some of the reasons why car insurance can be expensive in Texas include urban population, highway density, car theft rates, high speed limits, and natural disaster frequency. These factors increase the probability of crashes and accidents, which increases the risk for drivers to file claims.

Higher-Than-Average Highway Density

Texas has a higher-than-average traffic and highway density and long roads, so drivers spend more time on the road with other drivers. The more dense the highways and traffic are in a particular area, the higher the likelihood of crashes and accidents. Auto insurers in Texas view drivers in the state as a bigger risk because of this, and charge higher premiums.

High Urban Population Density

Car insurance rates in Texas may be costly because of the high urban population in the state. Urban neighborhoods typically have higher rates of accidents, car thefts and vandalism. This means insurance companies get more claims from highly populated urban areas and charge higher premiums to cover the increased risk.

Higher-Than-Average Vehicle Theft Rate

Texas has a higher-than-average rate of vehicle thefts compared to the rest of the U.S. Insurance companies use the rate of car thefts to calculate premiums because it impacts the number of claims the insurer is likely to get. When rates of car thefts are high, companies charge more for car insurance.

High Speed Limits

You may be paying high rates for car insurance in Texas due to the state’s high speed limits. Texas has the highest speed limits in the country, up to 85 mph. The national average speed limit is 69.8 mph. High speed limits in Texas mean the risk of crashes is higher in the state. Insurers factor in the increased risk when calculating car insurance premiums.

Frequent Natural Disasters

Texas is prone to disasters such as wildfires, hurricanes, winter storms and tornados. These disasters increase the risk of vehicular damage. Drivers are more likely to file claims in states like Texas, where natural disasters occur frequently. This is one reason you may have to pay more for car insurance in Texas.

Why Car Insurance in Texas Might Be Expensive for You

Car insurance rates in Texas are based on state-specific factors you cannot control and individual factors you may have some control over. The state-specific factors highlighted above affect car insurance premiums throughout the state.

Location and Zip Code

You may pay higher rates for car insurance in Texas depending on where you live in the state. Car insurance rates can vary widely depending on your Zip code. For instance, drivers in Houston pay an average of $1,560 per year for car insurance, while those in Wichita Falls pay 20% less than the state average at $1,052 per year.

Average Car Insurance Rates in Texas: States & Cities

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  • Location
    Annual Premium
  • Texas’s State Average
    $1,316
  • Houston
    $1,560
  • Wichita Falls
    $1,052

Insurance Company

If you are looking for affordable car insurance in Texas, it pays to shop around and compare quotes since rates can vary depending on the insurance company. Looking for a provider that offers a balance of affordability and excellent customer service is essential if you want to find the best car insurance in Texas.

You can use MoneyGeek’s car insurance calculator for Texas to get a personalized quote based on your age, driving history, and other personalized factors.

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Age

When buying car insurance in Texas, your age affects your rates. Younger drivers typically pay more for car insurance since they are classified as high risk due to inexperience.

For instance, a 16-year-old driver in Texas will pay $3,548 per year on average for car insurance, while a 40-year-old driver will pay significantly less at $1,316 per year. Thirty-year-old drivers pay the lowest average premiums at $1,094 per year.

Average Car Insurance Rates by Age in Texas

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  • State
    Average Driver (40-Year-Old)
    16-Year-Old
    25-Year-Old
  • Texas
    $1,316
    $3,548
    $1,211

Driving Record

A bad driving record is one of the main reasons car insurance in Texas could be expensive for you. Driving violations like DUIs or at-fault accidents can significantly increase car insurance costs since drivers with violations are considered high risk.

In Texas, a driver with a DUI will pay $1,987 per year for car insurance, while a driver with a clean record pays $1,316 per year. If you have a speeding ticket, your car insurance cost may be increased by $134 per year.

Average Car Insurance Rates by Driving Record in Texas

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  • State
    No Violation
    Speeding Ticket
    Accident
    DUI
  • Texas
    $1,316
    $1,451
    $2,048
    $1,987

Credit Score

Drivers in Texas with a good credit score can save on the cost of car insurance since they tend to attract lower premiums. If you have an excellent credit score, you will pay an average of $1,023 per year, $255 less than a driver with a good credit score.

A driver with a poor credit score will pay up to $1,066 more for their car insurance than a driver with good credit.

Average Car Insurance Rates by Credit Score in Texas

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  • State
    Excellent Credit Score
    Fair Credit Score
    Poor Credit Score
  • Texas
    $1,023
    $1,596
    $2,344

Car’s Make and Build

Your car's make and model can significantly impact your car insurance cost. Vehicles with a high value have higher premiums because the repair or replacement costs are much higher than an average car.

Sports cars are more expensive to insure because they are more likely to be in a crash. Since car value depreciates with age, older cars tend to be cheaper to insure than newer cars.

You can use MoneyGeek’s car insurance calculator for Texas to compare average insurance rates based on your car’s make and model.

Auto Insurance Calculator

State

Texas

Age

30-65

Driving Record

Clean

Credit Score

Excellent

Vehicle Type

Compact

Vehicle Year

2020

Liability Coverage

State Min

Comprehensive and Collision Insurance

None

Gender

Female
Average Annual Auto Insurance Rates

Click the section of the wheel in your price range to see options.

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on average

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Click your preferred price range to see company options.

Click an insurer below to visit their review page or continue to your personalized quote.

Company

Average Annual Rates

1.

USAA

$432

2.

Farmers

$452

4.

AAA

$565

5.

GEICO

$575

How to Save on Car Insurance in Texas

If you find that your car insurance in Texas is expensive, there are several ways to save on premiums, including:

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    Shop around for quotes.

    Car insurance rates can vary widely depending on the insurer, so comparing quotes from different providers will help you find the most affordable rates for your profile.

    You can use Moneygeek’s quote tool to get car insurance estimates.

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    Bundle your policies.

    Most insurance companies offer cheaper rates when you bundle car and home insurance policies. You can save on your premiums by looking up the best companies for bundling car and home insurance.

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    Seek out discounts.

    Depending on your profile, you may be eligible for discounts from the auto insurer, such as claim-free or safe driving discounts. These discounts can help make your car insurance premiums more affordable.

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    Increase your deductible.

    A car insurance deductible is the amount you pay out of pocket when you file a claim with your insurer. A policy with a high deductible typically has lower premiums than one with a low deductible. Switching to a higher deductible can lower your premiums.

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    Consider pay-per-mile insurance.

    If you drive less than 12,000 miles annually, pay-per-mile car insurance is a more economical option since you will be charged based on how much you drive.

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    Drop unnecessary coverage.

    It may be more economical to drop comprehensive insurance, especially when the cost of the premiums exceeds the value of your car or makes up more than 10% of your vehicle's cash value. However, before dropping full coverage, ensure you will not be underinsured.

Frequently Asked Questions

We answer commonly asked questions about why car insurance can be expensive in Texas to help you understand why your premiums may be costly.

About the Author


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Mark Fitzpatrick is a senior content manager with MoneyGeek specializing in insurance. Mark has years of experience analyzing the insurance market and creating original research and content. He graduated from Boston College with a Bachelor of Arts and Johns Hopkins University with a Master of Arts.


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