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Best car insurance in Texas

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Everything is bigger in Texas, and that's even true when it comes to car insurance.

Texans pay an average annual premium of $1,779 for car insurance -- the 10th highest rate in the country.

P.J. Miller, an independent insurance agent and partner with Wallace & Turner, Inc., says rates vary by state for many reasons.

"Typically, there are different legal mandates or requirements that are more liberal to the injured party, making it easier to receive a greater settlement [thereby raising costs for the insurance company]" Miller says. "Lower labor rates, lower parts prices for vehicles, lower sales tax rates, fewer vehicles on the road, and mandatory auto insurance are a few of the factors that tend to keep rates down."

Depending on where you live in Texas and your coverage, you can pay even more. People in Dallas usually pay the highest car insurance rates in the Lone Star State. Drivers in Grape Creek, Temple, and Killeen pay the lowest auto rates.

If paying nearly $1,800 for car insurance doesn't fit your budget or if you're looking for ways to save, here's how to find the best car insurance for your needs.


How insurance companies determine rates

In Texas, insurance companies use several variables to determine your car insurance rates:

  • Driving record
  • Claims history
  • Age
  • Car type
  • Zip code
  • Credit score
  • Whether you use your car for business or personal needs

One factor that might surprise you is your credit score. Nearly every state allows insurers to base their rates at least partially on a person’s credit history.

"Most carriers use credit as a portion of the rate-setting process, where permitted by law. While it is supposed to be a portion of the rate calculation, most believe it plays a significant role in determining price," Miller says. "There are countless other factors that enter into the behind-the-scenes formulation that make it almost impossible to know exactly why you pay, or are quoted, the final rate."

Texas drivers are required to carry:

  • Minimum bodily injury liability insurance of $30,000 per person or $60,000 per accident
  • Minimum property damage liability of $25,000

Underinsured and uninsured motorists are expected to have the same minimum liability coverage amounts, along with minimum property damage liability coverage of $25,000.

Sticking to the state minimum will limit your costs, but it will also increase your risk.

Mill says states typically have an incredibly low minimum mandatory limit. Keep in mind that $25,000 doesn’t go far in crashes.

Plus, if you have assets to protect, such as a house, it's best that to get more coverage -- even if costs more.

According to our analysis, the average annual rate for minimum liability coverage in Texas is $465. For liability coverage of $50,000 per person, $100,000 per accident and $50,000 of bodily injury, the average annual rate is $488. Full coverage with a $500 deductible is $1,300 a year on average.

Full coverage may cost hundreds or more than minimum coverage. However, there are ways to limit that pain, including taking advantage of discounts.


Auto insurance rates vary by company in Texas

When you shop for car insurance, first determine what level of coverage suits your needs.

Depending on the age of your vehicle, you might not need comprehensive and collision coverage.

If your car is more than 10 years old and has a low replacement cost, you might be able to forgo this coverage. If you have a newer car, you should consider getting at least:

  • $100,000 per person and $300,000 per accident in liability coverage
  • $100,000 for property damage liability insurance

If you need more help to determine the right level of coverage for your situation, use the Car Insurance Coverage Calculator. Then, get quotes from at least two auto insurance companies for the same level of coverage.

Car insurance companies’ rates vary. Here’s how six insurers compare in Texas for three coverage levels:

  • State minimum liability requirements
  • Liability limits of $50,000 per person/$100,000 per accident, and $50,000 property damage
  • Liability of $100,000 per person/$300,000 per accident and $100,000 property damage, with comprehensive and collision at $500 deductible


State minimum average annual rate

50/100/50 average annual rate

100/300/100 average annual rate





Colonial County Mutual








Government Employees






State Farm



How to get the best car insurance in Texas

If these rates still sound too high, several other things can help you find the best car insurance:

  • Scour membership and affinity programs for discounts: AARP and military members can get discounted insurance. Your employer, alumni associations, and wholesale clubs are also good places to search for potential discounts. Affiliation discounts can save you as much as 25%.
  • Raise your deductible: Increasing your deductible to $1,000 can save you 40% or more on car insurance costs, according to the Insurance Information Institute.
  • Combine your coverage: Bundle auto coverage with your home or renters’ insurance policy: Showing your loyalty to one insurer could help you land a discount, especially if you have multiple policies. Renew your plan early and you could get a discount, as well.
  • Be a good driver: "Speeding tickets can dramatically impact your rates," Miller says. Being a safe driver can lower your car insurance by 5% typically. Driving fewer miles a year will also reduce your rate.
  • Take a driver training course: If you'll add your teen to your insurance policy, sign him or her up for a driver's education course, since this can lower your rate. Consider taking a defensive driving course to get a discount on insurance. Contact your insurance company to make sure it offers this discount and then search online or your insurer's website to find qualifying local courses.

Auto insurance is part of car ownership cost, but that doesn't mean you have to pay exorbitant prices to get the best coverage. Do some research to determine how much coverage you really need and get quotes from several different insurers to compare their rates. With a little time and effort, you can find the best car insurance company in Texas for you.

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