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Why is Texas Auto Insurance So Expensive?

If you recently moved to Texas from another state, you might find that your monthly auto insurance rates have increased, and you’re curious as to why this might be the case. Even if you’re a lifelong Texas resident, it’s still a good idea to know as much as possible as to why your auto premiums could be higher than if you lived in some other states. 

In this article, the IHS Insurance Group professionals will start by explaining some of the high-level factors that go into the cost of insurance across all states in the US. Then, we’ll talk about some of Texas’s unique aspects that could result in higher auto insurance premiums. 

What Factors Impact How Much a State Charges for Auto Insurance? 

What you ultimately pay for auto insurance is first determined by individual insurance companies, who then send their desired rates to the state Insurance Commissioner for approval. If the Commissioner agrees with their rates and their rationale, companies can then implement their new rates and charge customers more or less, depending on their specific filing. 

From there, how much you pay for your auto insurance will largely depend on where you fall next to the carrier’s filed rates regarding crucial factors like the age, gender, marital status, credit, and driving history of any active drivers in your household. 

For example, Company A might focus on increasing the number of older or younger drivers on their books and offer more competitive rates to those demographics. On the other hand, Company B might want to attract married homeowners with clean driving records, and therefore provide these groups better auto insurance premiums. 

Compared to the Other States, Why is Texas Auto Insurance So Expensive? 

According to The Simple Dollar, the average annual car insurance premium for Texas residents is $1,779, which is about 18 percent higher than the national average of $1,457 per year. As with any other case cause-and-effect scenario, though, there isn’t a single reason as to why this is the case. 

However, several vital facts could play roles in Texas’s higher auto insurance rates: 

  • Texas is the second-most populous state, with 84 percent of residents living in urban areas. Driving in cities is statistically riskier than driving in rural areas because you’re more likely to be involved in an accident or incur damage to your car. 
  • Along these same lines, Texas residents spend a lot of time in their cars. And the more time you spend driving, the more likely it is that you’ll be involved in an accident. 
  • Many of Texas’s urban areas are flush with money, leading to more expensive cars on the road. 
  • According to Cover.com, Texas led the nation in car accident fatalities in 2017, which is something carriers have to account for when determining their auto insurance rates. 
  • Similarly, 38 percent of all traffic fatalities in Texas were determined to have alcohol as an underlying cause, which is meaningfully higher than the national average of 29 percent. 
  • Between tornadoes, hurricanes, and just about everything else, Texas residents are subjected to frequent natural disasters, along with the related auto damage claims. 
  • Based on 2015 data (the most recent year information is available) from the Insurance Information Institute, Texas ranks 16th among US states for the number of uninsured drivers on the road. 
  • Texas boasts the fastest speed limit in the country (85 mph along Hwy 130). The faster you drive, the more risk is involved. 
  • At $30,000 liability coverage per person, up to a total of $60,000 per accident, and $25,000 worth of coverage for property damage costs (30/60/25), Texas has slightly higher minimum limits than the national average. 

With all of these details in mind, the reality is that you don’t have to pay more than you need—or are comfortable with–for your auto insurance in Texas. Next, we’ll outline some methods that can help you save before wrapping up. 

How Can You Avoid Paying Too Much for Your Texas Auto Insurance? 

To get the best possible rates on your auto insurance, you’ll want to make sure that you have the best possible credit and insurance scores, little-to-no driving activity (accidents, whether at-fault or not-at-fault, in addition to moving violations), at least several years of driving experience for anyone of age, and that you don’t own any high-value vehicles. 

The good news is that even if your situation doesn’t meet all of these parameters, the friendly staff at IHS Insurance Group can help you select different coverage options from some of the top carriers in Texas, which can help you ultimately obtain the best coverage for the least amount of money. We’ll also help ensure that you are receiving the most discounts possible for things like multiple policies, anti-theft systems, and your student’s good grades, to name just a few. 

But, we can’t help you maximize your insurance budget if you don’t get in touch first! If you would like to obtain a FREE Quote, we have two convenient ways to reach us: 

  1. If you prefer to talk to a licensed agent directly, please call (866) 480 5063.
  2. If you prefer to fill out a quick form and have an agent get back with you at your convenience, use the GET A FREE QUOTE.
  3. Lastly, for those that want an immediate quote, please click HERE.

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