Getting cheap car insurance in Texas isn’t just a matter of luck. With more than 29 million registered drivers all over the U.S. and competing for coverage from a variety of carriers and distinct rate factors, some may find that the premiums for the best and worst quotes for a specific driver can be hundreds of dollars annually. 

Fortunately, the Texas insurance industry continues to be a competitive landscape, and by knowing how insurance works, drivers can afford to always get the right insurance policy at an affordable price.

Why Texas Rates Vary So Widely

There is no statewide rating system in Texas. All insurers submit their rates to the Texas Department of Insurance, and each insurance company evaluates risk factors in a different manner. This is one reason why nearly identical cars could get quotes that vary by 20 per cent or more from the same company. 

The geographic factor has an undeniable significant influence. Claims per capita are higher in urban metros, such as Houston and Dallas, due to traffic volume and vehicle theft rates, which drive premiums up compared to lower traffic or theft densities in smaller metros and rural counties. The other key factors are vehicle type, credit-based insurance score, annual mileage and claims history.

State law also has a role to play in defining what is “cheap” means. Texas has the following minimum liability coverage requirements for all drivers: $30,000 for bodily injury protection per person, $60,000 per accident and $25,000 for property damage as specified by the Texas Transportation Code. 

A policy that’s less expensive than it costs to cover these minimums is not a good deal, it’s a liability and it can result in fines that begin at about $175, increase rapidly with subsequent violations and could mean losing your license.

Where the Real Savings Come From

One sure way to reduce a premium is to bundle. It makes sense that, if you already have a homeowners or renters or business policy with the same carrier, you should get your auto policy from that same company as well; this is usually the case because the one policy is frequently worth less than the other when purchased individually. Payment history is also a factor: insurers will discount automatic payments and paid-in full, 6-month payment terms, which are not always publicly listed but almost always available upon request.

Another sales lever many Texas motorists ignore is deductible selection. Increasing the deductible for comprehensive coverage and collision coverage from $500 to $1,000 can make sense for some drivers as it will provide a tangible reduction in the monthly cost of their insurance. 

These are compounded by other discounts, including good-student, defensive-driving course completion, low-mileage discounts and multiple-vehicle discounts, and they’re worth asking about individually since they’re not offered by all carriers.

In Texas, credit-based insurance scores are more weighty than in many other states since Texas does not have restrictions on the use of these scores like some states do. If drivers clear their revolving debt and fix any mistakes on their credit score prior to shopping for a policy, they’ll notice that the quotes they’re offered will differ greatly.

What to Watch Before You Buy

Not all low quotes are good long-term investments. Other policies offer a good introductory rate, but hike up significantly at renewal time, especially for drivers with little insurance history. Before you sign, ask if the quote is based on six-month or 12-month rates, and make sure you include the deductible in comprehensive and collision coverage in case you have an accident, and a significant number of Texas drivers are uninsured, meaning they have no coverage: It’s not required, but it is a good idea to look into it in most cases.

It also encourages re-evaluating coverage every year instead of staying with the same policy assuming that the policy of the previous year is the best one to have. A change in life circumstances, whether it’s a new address, a new driver record, or a paid-off loan — can sometimes make a big difference in what a driver is eligible for.

Full Coverage vs. Liability-Only: Picking the Right Starting Point

Knowing what type of policy is right for you is a good starting point to compare quotes. Liability-only provides the state mandated coverage and has a lower premium, and this is logical for those who own an older, paid-off vehicle that isn’t worth much and is a lemon. 

Full coverage with comprehensive and collision coverage generally comes at a higher price but is usually a requirement for virtually all lenders and covers Texas-specific hazards such as collision, comprehensive, hailstorms, flooding and theft, which are not covered by liability coverage.

Regional Differences Worth Knowing

Average rates may not be representative if they do not consider where you reside in Texas. In most cities, including Houston, drivers typically face higher premiums than drivers in other smaller cities due to the traffic density and increased frequency of claims. Drivers in rural counties may be more likely to be insured, but less likely to have claims, because they are less likely to be in a crash.

Drivers in rural counties are also less likely to be in a crash despite the longer distance they travel, which often results in lower claim rates. Another example is that when a driver checks the web for a national “average rate,” it usually does not represent their rate and a locally underwritten rate is more representative of what the driver will be quoted.

The Bottom Line

Cheap car insurance in Texas is achievable, but it requires comparing real quotes rather than assuming the first offer is the best one. Between bundling, deductible strategy, discount stacking, and working with an agency that can shop multiple carriers at once, most Texas drivers have more room to save than they realize. 

For drivers who want low cost auto insurance in Texas without cutting corners on required coverage, a quick call to a licensed local agency remains the fastest way to see what is actually available at their address, for their vehicle, and for their driving record.