Car insurance in Texas isn’t the most expensive in the country, but it’s not the cheapest either. The average Texas car insurance rate is $1415 per year, almost on par with the national average of $1483.
This could be higher depending on where you live in Texas. According to The Zebra, drivers in Dallas, Houston, and Mesquite pay the highest rates in the state — $1,680, $1,671, and $1,638 respectively.
So why does the Lone Star State have higher car insurance rates than many other states? Let’s look at the factors that influence car insurance rates in Texas and what you can do to lower your rate.
Factors Influencing the Cost of Auto Insurance in Texas
Frequent Claims
Insurance companies consider your claims history when determining insurance rates. For example, if you filed more than one claim in a year, your insurer could increase your premium by 25% or more.
Texas has one of the highest frequency rates for auto accidents. According to crash statistics issued by the Texas Department of Transportation (TxDOT), in 2019:
- 1 reportable crash occurred every 56 seconds
- 1 person was injured every 2.3 minutes in a car crash
- 1 person was killed in a car crash every 2.25 hours
When traffic accidents occur, insurance claims follow. The more claims, the more car insurance rates increase.
A traffic accident can result in a higher premium for up to three years after the incident. This is because insurers view drivers who have been involved in a car accident as riskier than those with an incident-free record.
Fraudulent Claims
Insurance fraud costs all consumers money because fraudulent claims push up the price of insurance policies for everyone.
In Texas, 8.3% of motorists are uninsured. As a result, insured drivers are adding “uninsured driver coverage” to their policies to protect themselves in the event of an accident involving an uninsured driver.
Knowing this, uninsured drivers more commonly perpetrate insurance fraud by filing false claims against insured drivers for injuries sustained in an accident, even if they (the uninsured driver) caused the accident.
Some fraudulent claims include staged accidents, in which one driver sets up an accident to try to collect an insurance payout.
While insurance companies do their best to detect fraud, many such claims still slip through the net. This results in higher car insurance premiums across the state.
Driving Record
Your driving record directly impacts your car insurance rate. Based on the TxDOT crash statistics, you can see that Texas drivers do not always practice safe driving.
If you have multiple traffic violations or tickets on your driving record, your rates will increase accordingly. The more violations, the more you’ll pay. By maintaining a clean driving record, you can potentially cut your insurance premium by up to 8%.
For even cheaper Texas car insurance, consider taking an advanced driving course. Most insurers will grant an insurance discount to drivers who have completed an advanced driving course.
Age and Gender
Another factor insurance companies take into account when calculating your car insurance rate is your age and gender. Insurance companies view young men, especially those under the age of 25, as riskier drivers than women.
Younger drivers are more likely to speed, use a cell phone while driving, not wear seat belts and engage in other reckless driving behavior. They also have less driving experience and, therefore, are at a greater risk of being involved in accidents than older drivers.
A male driver under the age of 20 could pay 14% more for car insurance than a female driver of the same age. Insurance premiums start to decrease after age 25.
Where You Live
Where you live also affects how much you’ll pay for car insurance. If you live in a rural area with a lower population rate or in an area where auto theft rates are lower, you’ll probably enjoy lower car insurance rates.
One of the reasons Dallas and Houston have higher car insurance rates is because these areas are more densely populated and, therefore, experience a higher number of traffic accidents and auto thefts.
These two cities also experience storms, hurricanes, and tornadoes. In areas beset by inclement weather, car insurance is typically higher.
In Summary
Insurance companies assess risk when setting car insurance rates. To determine how high or low the risk is, they look at your personal driving record and claims history. They also take into account how many traffic accidents occur in your city and how many insurance claims are filed in the state.
Every state’s insurance profile is different. The greater the risk factors, the higher car insurance rates in that state. If every Texas driver improved their driving habits, the cost of car insurance in Texas will start to drop and everyone will benefit from cheaper auto insurance rates.
