What you need to know about buying car insurance in Texas

Shopping around for auto insurance in Texas? Expect to pay about 7% or $146 more yearly than the national average for a full coverage policy: $2,043 versus $1,897, respectively. Of course, you’ll pay less with a liability-only policy, but that is also more expensive in Texas than the U.S. average: $572 versus $503 per year.

“Coverage in Texas tends to cost more due to adverse weather, such as hailstorms and hurricanes, causing increased claims,” says John Crist, founder of Prestizia Insurance in Dallas.

This guide will help you navigate the complex auto insurance market by providing straightforward data and pricing details, ensuring you select a provider that suits your needs.

Key highlights

• The average yearly price of car insurance in Texas is $2,043 for a full coverage policy
• An insurance policy that only meets the state’s minimum coverage for liability insurance is $572 per year on average
• On average, Texas drivers pay the least for full coverage every year in Austin ($1,930) and the most in Houston ($2,317)

Understanding car insurance requirements in Texas

Texas is like most states: You are required to have a minimal amount of liability auto coverage. In the Lone Star State, that amount is:

• Bodily injury liability, per person per accident: $30,000
• Bodily injury liability, per accident, total: $60,000
• Property damage liability: $25,000

“Texas law requires all drivers to carry minimum liability insurance to lawfully operate a vehicle,” says Michael Hotchkiss, CEO of Hotchkiss Insurance in Houston. “Texas does not really care if you decide to protect the physical property of your own vehicle, but they do require you to carry liability insurance to provide insurance limits to other parties that you may be legally responsible for an auto accident.”

Additionally, you must present proof of valid auto insurance to register a vehicle in Texas. If you don't provide acceptable insurance documentation, the DMV could suspend your vehicle registration, leading to additional penalties when you attempt to reinstate it.

Average cost of car insurance in Texas

Texas isn’t the most expensive state for car insurance premiums, but drivers pay slightly more than the national average for coverage.

“The cost of car insurance in Texas is driven by numerous factors, including accident frequency and severity, rising replacement costs, more litigated claims, escalating medical costs, severe weather events, and a high volume of uninsured motorists,” says Mark Friedlander, director of corporate communications for the Insurance Information Institute (Triple-I), an industry research and education organization.

In Texas, a state-required minimum liability policy with 30/60/25 coverage limits will cost $48 per month or $572 annually, slightly higher than the national average. Opt for a liability-only policy with 50/100/50 coverage limits – and the cost differences widen. This upgraded policy in Texas will set you back $65 monthly or $774 per year. 

Bump that policy up to full coverage car insurance – including comprehensive insurance and collision insurance to protect your vehicle – and you’ll likely pay $2,043 annually, $146 more than the $1,897 national average cost ($158 monthly).

The rates listed below were obtained from the auto insurance comparison site CarInsurance.com and its data partner Quadrant Information Services. They reflect pricing for a full coverage insurance policy with liability limits of 100/300/100 and a $500 deductible for comprehensive and collision coverage. The rates apply to single, 40-year-old male and female drivers of a 2023 Honda Accord LX with a good insurance credit score and a clean driving record.

How to find cheap auto insurance in Texas

Want to pay less for car insurance coverage in Texas? Friedlander says the key is to shop around and get at least three quotes from different insurers.

“You can use online comparison sites, work with local exclusive and independent insurance agents, or contact insurers directly to obtain quotes. Your goal should be obtaining the most robust policy for the best price,” he says.

Car insurance rates, by company, in Texas

According to our analysis, the Texas Farm Bureau provides the state's most affordable car insurance rates, with an estimated monthly cost of $108 or $1,301 per year. However, you must be a member to purchase insurance. Among national carriers, Nationwide has the cheapest average rate, $1,502 annually. On the other end of the spectrum, the costliest carrier is Farmers at $4,127 yearly.

Insurance companies use advanced algorithms to assess risk and set their rates accordingly. The higher your risk profile, the more you can expect to pay for coverage. Factors such as the type of vehicle you drive, your driving habits, location, age and credit history influence your risk level. Below, you’ll find sample costs for the top insurance providers in Texas.

Comparing car insurance quotes in Texas

To provide a better snapshot of how your circumstances could impact your premium quotes, take a look at the following Texas averages when it comes to auto insurance:

Texas car insurance cost by city

In Houston, drivers are charged the most in Texas: $2,317 per year on average. Dallas isn’t far behind, where yearly premiums typically cost around $2,278. But if you live in Austin, you may pay only $1,930, on average, annually. That’s $387 less than Houstonians pay. Consider that the average insurance premium nationwide is $1,897.

Frequently asked questions

How can I save on car insurance in Texas?

Start by getting rate quotes from several carriers and then carefully comparing policies, rates, and terms to narrow down the best deal. Take advantage of the discounts that insurers offer to lower your cost of coverage. These discounts include bundling your auto insurance with either a home or renters policy; paying your bill in full and opting for paperless billing; having multiple cars on the same policy; being a safe driver with no accidents or moving violations for at least three years; being a loyal customer; being an active-duty military member or veteran; and having a student on your policy who maintains a certain grade point average.

Is Texas a no-fault state?

No, Texas is not a “no-fault” state regarding auto insurance. It is considered a “tort” or “at fault” state, meaning both parties' insurers evaluate the circumstances to determine which driver is responsible for the incident. After fault is determined, the responsible driver or their insurance company must pay for the damages that person is liable for.