Knowing these rules is the best way to protect yourself when shopping for insurance in any state! So we went straight to the source–government websites–to compile the details you need to know.
We also looked at specific insurance companies that are licensed to provide insurance in Texas. The insurance company that works best for you may be different than the one that works best for your neighbor.
Some companies place a higher weight on your driving history, which could be bad if you have a couple of minor violations. Others place a heavier emphasis on your age, which isn’t great if you’re in the under-25 crowd.
Still, we looked at general policy options from the Texas database, financial stability, and customer complaints for many Texas car insurance companies. What we came up with is a list anyone shopping for car insurance in Texas can use.
We didn’t only look at rates when ranking the best car insurance companies. But, of course, getting good value for your money is important. So we will also look at estimated rates for each company featured in this article. The rates are for minimum liability coverage for a fairly average married woman–aged 25 to 65 with average credit, a car she drives to and from work, and a clean driving record. Keep in mind however, that your results could vary dramatically depending on a variety of other factors.
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Compare Car Insurance Plans in Texas
Our Top Five Picks for the Best Car Insurance in Texas
1. National Surety Corporation–You may not have heard of this insurance company, but it’s one of the top in Texas as far as complaints go. It’s got a below average number of complaints according to the state’s database. And it has an A+ financial rating from A.M. Best. What’s more, it came out on the low end of our estimated pricing, at just $320 per year.
2. Allstate–A larger insurance company, Allstate has about an average number of complaints made against it in Texas. This means most consumers are happy with the company and its car insurance product. It also came out near the top of our price comparisons, at just $390 per year for basic liability coverage. Allstate also has an A+ rating from A.M. Best.
3. Farmers Texas County Mutual Insurance Company–This name may sound unfamiliar, but it’s not. It’s the Texas name for Farmers Insurance. It gets way fewer consumer complaints than average. It has an A rating from A.M. Best, and its annual liability coverage estimate came out to $417 per year. With flexible policy options, they may just have what you’re looking for.
4. Hartford of Texas General Agency–This insurer gets good marks for pricing, at about $450 per year according to our quote. It also gets an A financial rating from A.M. Best, meaning it’s a financially stable company. Hartford also gets almost half as many complaints in Texas as the average company.
5. Progressive County Mutual Insurance–Progressive is known for its snazzy ads and commercials. In Texas, it’s also known for customer satisfaction, since customers are about half as likely to report a complaint to the state as with the average insurance company. The quote came out at a competitive $505 per year, and the company has an A+ financial rating.
Texas Auto Insurance Requirements
Like all states, Texas has mandated minimum car insurance requirements. In Texas, the required coverage is 30/60/25. These are the liability insurance minimum coverage amounts. It means that you need $30,000 for each injured person for up to $60,000 per accident, and $25,000 for property damage. Keep in mind that this may not be the amount of insurance you actually need. It’s just the absolute minimum Texas requires for you to legally operate a vehicle.
Texas law requires that “the motorist or operator of a vehicle” prove their financial responsibility–typically by providing proof of insurance–when they drive. Failing to provide proof of insurance can cost you a pretty penny. In fact, a first time offender can be charged up to $350 plus court costs.
Your penalties–both financial and when it comes to your driver’s license–will get worse if you continue to get caught driving without insurance. In fact, continued offenses could cost you up to $1,000, plus court fees. You may have your driver’s license suspended. And in some cities, driving without insurance can even get your vehicle towed.
Proof of Insurance
In Texas, motorists need to have proof of insurance and also be registered by TexasSure, the state’s insurance verification program. We’ll talk more about TexasSure below. For now, know that Texas has strict proof of insurance laws.
Many drivers in Texas can simply carry the standard proof of insurance card issued by the insurance company. And in 2013, the Texas State Legislature made it legal for motorists to show their proof of insurance on their phones, as well.
However, in certain circumstances, you may need to also show a Financial Responsibility Insurance Certificate (SR-22) form verifying that you are maintaining liability insurance for your vehicle. You can get an SR-22 from your insurance company. It basically proves that you have the minimum liability coverage required by law.
You’ll need an SR-22 if your driver’s license has previously been suspended or revoked because of a car crash, conviction, or judgment. You have to file this form from your insurance company with the Department of Public Safety (DPS). And you’ll have to maintain this coverage for two years starting from the date of conviction or the date of judgment. You’ll also need an SR-22 if you’re required to place a security deposit with DPS as compliance for your license suspension.
If you’re on the list of those required to file an SR-22, your regular insurance card won’t cut it. The SR-22 allows DPS to have more visibility into your current insurance status. As soon as you cancel your insurance policy or let it lapse, your insurer will notify the Texas Department of Public Safety. If you’re required to have an SR-22 on file and your insurance company notifies DPS of the cancellation, your license will be suspended again.
Average Cost of Coverage in Texas
According to the Insurance Information Institute (III), the average cost of car insurance in the United States in 2014 was $866.31 per year. Texas falls somewhere in the middle of the pack as far as insurance costs go. The III ranked the state number 35 in 2014.
The average cost of liability insurance was $516.26 per year, and the average cost of collision coverage was $357.61 per year. For comprehensive insurance, motorists paid an average of $192.33.
Many drivers owe money on their vehicles. Thus, they need more than just liability coverage. The average total cost of insurance in Texas in 2014 was $905.64 per year–about $75 per month.
Cost of Auto Insurance in Texas
As with any other state, the cost of car insurance in Texas depends on a variety of factors: how much coverage you opt for, the type of vehicle you drive, your personal driving record and even where you live. It’s also legal for auto insurers to use your credit history when determining eligibility or setting rates.
Texas’s insurance site provides a list of auto insurance companies that use some form of credit scoring during the application and price-setting process. It also includes a list of a handful of companies that do not consider credit.
Credit aside, your costs will vary in Texas depending on your circumstances. We used Texas’s auto insurance pricing tool to look at a few different scenarios. We compared people of different ages, credit ratings, and driving records. You can see from the results just how much variance there is between companies and pricing options.
Here are the results:
|County||Gender||Marital Status||Age||Credit Rating||Coverage Limits||Vehicle Type||Vehicle Use||3-Year Driving Record||Lowest Rate||Highest Rate|
|Bexar||Male||Single||Under 25||Average||30/60/25||Truck||To and From Work||1 Speeding Ticket||$863 -- United Services Automobile Association||$9,349 -- Safeco General Agency|
|Bexar||Female||Married||25-64||Good Credit||100/300/100||Car||To and From Work||No Violations||$236 -- Allstate||$1,824|
|Lynn||Male||Married||25-64||Bad Credit||30/60/25||Car||To and From Work||No Violations||$242 -- Government Employees Insurance Company||$1,528 -- Geico|
|Leon||Female||Single||Under 25||Good Credit||50/100/50||Truck||To and From Work||One At-Fault Accident||$587 -- Geico||$6,525 -- Safeco|
The amount of variance in pricing even for the same person means you definitely need to shop around. Luckily, Texas provides a great worksheet to help you do that. You can download it here and use it to quickly compare insurance companies and quotes.
Texas’s Unique Car Insurance Rules
Texas has some laws in place to protect consumers when it comes to car insurance. You can find the full list of rules here. They include:
- Insurance companies must provide consumers with a toll-free number to ask questions or lodge complaints.
- Insurers must provide consumers with proof of insurance.
- Insurance agencies cannot require you to purchase more insurance than is required by law.
- Insurance companies cannot deny you insurance solely because of your credit history, though they can use your history in setting insurance pricing.
- You have a right to buy minimum liability insurance through the Texas Automobile Insurance Plan Association, outlined in the next section, if you are denied insurance from other plans.
- Insurance companies cannot require you to pay the full year’s insurance premium at once. You can pay a 12-month policy in at least ten equal monthly installments or a six-month policy in at least four equal monthly installments. Insurers do have the right to charge a fee for installment payments.
- If you have signed up for automatic payments, your insurance company cannot increase the monthly amount withdrawn without 30 days’ written notice.
- If an insurer reduces the amount of coverage provided by your policy, they must give you a written explanation of the reduction.
- If an insurer denies your application, they must provide you with a written explanation of why you were denied.
- An insurance company can divide a county into sections in order to charge different rates to different areas. But the difference between the highest and lowest rates in the county cannot exceed 15% “unless actuarially justified.”
Besides these consumer protection laws, Texas has another insurance law quirk: TexasSure. This is a vehicle insurance verification program charged with the task of cutting back on the number of uninsured drivers in Texas. The TexasSure database connects insurance policies to license plates and vehicle identification numbers (VINs) to give more visibility into drivers’ insurance coverage.
Any insurance company that writes personal auto insurance in Texas is required to report up-to-date policy information to TexasSure. In fact, they report these policies on a monthly basis. Authorized users, including law enforcement officers, county tax assessor offices, and some state agency staff can view your records in TexasSure.
The only thing you have to do to make sure your insurance policy is reported to TexasSure is to choose an insurer who is licensed to provide insurance in Texas. If you move to Texas from another state, first make sure your insurance is licensed. If it is, you can stick with the same insurance company. You’ll just need to let them know that you live in Texas so that they can report your information to TexasSure.
Texas Sponsored Programs
If you can’t afford even the cheapest insurance in Texas, you may need to turn to the Texas Automobile Insurance Plan Association (TAIPA). This coalition of insurance companies provides only minimum liability coverage to motorists who cannot qualify for or afford other insurance.
To apply for TAIPA, you’ll have to meet with an agent, who will submit your application. You’ll need to make a down payment on the insurance. Once your application and down payment are submitted, TAIPA will take care of the rest. As long as you continue paying for your TAIPA coverage, you’ll be able to drive legally in Texas.
Top 10 Car Insurance Companies in Texas
Sometimes when you’re shopping for the best car insurance, you need to dig deep to find a hidden gem. But other times, you can go with the crowd. Here, according to the Texas Department of Insurance, are the state’s top ten most popular insurance companies.
|1||State Farm Mutual Auto Insurance Company||16.15%|
|2||Progressive County Mutual Insurance Company||6.56%|
|3||Farmers Texas County Mutual Insurance Company||7.84%|
|4||Allstate Fire and Casualty Insurance Company||7.26%|
|5||Home State County Mutual Insurance Company||4.03%|
|6||Geico County Mutual Insurance Company||3.98%|
|7||Government Employees Insurance Company||3.07%|
|8||United Services Automobile Association||2.65%|
|9||Liberty County Mutual Insurance Company||2.62%|
|10||Colonial County Mutual Insurance Company||2.62%|
One interesting factor of the Texas Department of Insurance website’s auto insurance pricing tool is customer complaint data. It uses a complaint index, which shows how the number of complaints filed against a company compare to other companies. The average index is 1.00. Companies with a complaint index of less than 1.00 have received fewer than average complaints. Companies with a complaint index of greater than 1.00 have received more than average complaints.
When looking at complaint indexes alone, here are the top 10 Texas auto insurance companies with the most satisfied customers:
|Rank||Company Name||Complaint Index|
|1||AIG Property Casualty Company||.0000|
|2||Encompass Indemnity Company||.0000|
|3||Mercury County Mutual Insurance Company||.0000|
|4||National Surety Corporation||.0000|
|5||Texas Automobile Insurance Plan Association||.0000|
|6||Texas Farm Bureau Underwriters||.0000|
|7||Trinity Universal Insurance Company||.0000|
|8||Amica Mutual Insurance Company||.1254|
|9||Travelers Quantum Auto 2.0 Program||.3331|
|10||Foremost County Mutual Insurance Company||.3591|
As when shopping for any financial product, be sure to look at both well-known companies and lesser-known options. You may just find an affordable, high-quality car insurance option in Texas that you have never heard of. But take this information–rates, financial stability, customer satisfaction, and more–into account as you shop around.
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Save Even More With Gabi
Gabi – an online insurance comparison tool – is a pretty distinctive service. Available in Texas, they can help you find a new insurance provider for a lower cost. What’s different, though, is HOW they do it. They help people find and switch to a cheaper insurance plan in minutes (for free) with their proprietary technology. Just enter your existing insurance provider information, or upload a PDF of your current policy information, and Gabi will do the rest. On average, Gabi says they save their clients about $825 a year.