Texan car insurance rates are disproportionately high due to several factors. With three of the ten most populous cities in the United States and a rapidly growing population across the state, it’s no wonder Texas auto insurance is expensive. In fact, for full coverage, Texans can expect to pay around $5,335 annually, while minimal coverage costs approximately $1,689 per year. These figures far exceed the national averages of $2,000 for full coverage and $700 for minimum coverage.
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The cost of auto insurance is increasing both in Texas and throughout the country. As insurers face higher expenses, they pass the burden onto insured drivers, causing premiums to rise with each policy renewal, regardless of any personal changes such as driving record or location.
Reading: Why is texas auto insurance so high
Top Reasons for Expensive Auto Insurance in Texas
- Texans drive more: With increased driving comes more accidents, claims, and payments. In 2020 alone, Texas recorded around 3,520 fatal accidents, up from 3,190 in 2015.
- Rising car repair costs: Modern vehicles boast advanced technology and features, leading to higher repair expenses. Between 2014 and 2018, the average cost of vehicle repairs increased by approximately 8% according to the National Association of Insurance Commissioners.
- Uninsured drivers: As insurance costs continue to climb, an increasing number of drivers in Texas are opting to drive without insurance. In 2019, a noteworthy 8% of drivers lacked even minimal liability insurance. The burden of uninsured drivers falls on consumers through higher premiums.
- Escalating medical care expenses: Auto insurance companies bear the brunt of medical bill claims, and the cost of healthcare continues to rise in Texas, increasing by an average of 6.9% annually.
- Severe weather conditions: Texas is experiencing more frequent and severe weather events such as storms, droughts, and tropical cyclones. Insurance companies must pay out more expensive and unpredictable claims as a result, necessitating rate hikes to keep up.
While these reasons contribute to high insurance rates, there could be other factors at play affecting individual rates.
If your driving record is clean and rates remain elevated, your car insurance may still be expensive due to:
Statistically, drivers under 25 and over 65 are more prone to serious and fatal accidents, resulting in higher premiums. In Texas, 16-year-old drivers pay an average of $3,930 per year, 25-year-olds pay around $997, and seniors aged 65 or older pay approximately $797 annually.
Location and driving patterns:
Densely populated cities like Houston, Edinburg, and Pasadena have higher premiums due to increased accidents, property crimes, and frequent claims. Moreover, your driving patterns, such as long commutes or regular travel through high-risk areas, can significantly impact rates.
Texans without credit pay a staggering 70% more in premiums compared to drivers with excellent credit. Demonstrating financial responsibility by maintaining continuous coverage with no gaps and minimum auto insurance is crucial. A lapsed coverage can lead to higher rates when obtaining your next policy.
History of claims:
If you have recently filed multiple claims, it’s likely your premiums will increase. In some cases, paying out of pocket makes more sense, especially if the claim doesn’t exceed your deductible.
How to Obtain Cheaper Car Insurance in Texas
While some factors affecting auto insurance costs are beyond our control, we can influence many others. The best way to minimize insurance expenses is by driving safely, adhering to traffic laws, and maintaining a clean driving record.
Additionally, it’s crucial to compare rates from at least three insurance companies. Reviewing rates every 6-12 months during policy renewals is ideal, but at a minimum, evaluate your options every three to five years. Keeping an eye on your driving record and searching for better rates could yield savings, particularly if a traffic violation is no longer listed.
In Texas, policy costs range from approximately $842 to $3,107 per year for identical driver profiles. By diligently comparing insurance options, you could save up to $2,265. Remember to inquire about all eligible discounts to maximize your savings potential.