Texas Car Insurance: The Complete 2025 Guide
Everything you need to know about insuring your vehicle in the Lone Star State—from minimum requirements to the cheapest companies.
Texas Quick Facts
🤯 The Texas Mindblower
Texas is the second-largest auto insurance market in the US, but has some of the weakest consumer protections. Unlike California, Texas allows insurers to use credit scores with virtually no restrictions—drivers with poor credit pay up to 84% more than those with excellent credit for identical coverage.
Texas Minimum Insurance Requirements
Texas uses a traditional tort (at-fault) system. The state requires the following minimum liability coverage, often called "30/60/25":
| Coverage Type | Minimum Required | What It Covers |
|---|---|---|
| Bodily Injury (per person) | $30,000 | Medical bills for one injured person |
| Bodily Injury (per accident) | $60,000 | Total medical bills per accident |
| Property Damage | $25,000 | Damage to other vehicles/property |
| Personal Injury Protection | Optional | Your own medical expenses |
| Uninsured Motorist | Optional (offered) | Protection against uninsured drivers |
Warning: The $25,000 property damage minimum is dangerously low. The average new vehicle costs over $48,000 in 2025. If you total someone's new truck, you'll be personally liable for $23,000+.
Average Car Insurance Costs in Texas
Texas premiums run about 10% below the national average, but costs vary dramatically by city and driving record.
| Coverage Level | Annual Premium | Monthly Cost |
|---|---|---|
| State Minimum (30/60/25) | $678 | $57 |
| Full Coverage (100/300/100) | $2,410 | $201 |
Costs by Major Texas City
| City | Avg. Annual Premium | vs. State Avg. |
|---|---|---|
| Houston | $2,890 | +20% |
| Dallas | $2,756 | +14% |
| San Antonio | $2,312 | -4% |
| Austin | $2,198 | -9% |
| El Paso | $1,876 | -22% |
Top Car Insurance Companies in Texas
State Farm dominates the Texas market, but USAA offers the best rates for those who qualify.
State Farm
Largest Market Share18.2% market share in Texas. Local agents throughout the state. Complaint ratio: 0.79
USAA
Lowest ComplaintsMilitary families only. Complaint ratio: 0.51 (half industry average). Based in San Antonio.
GEICO
Best RatesOften cheapest for good drivers. No local agents. Complaint ratio: 1.12
Progressive
High-Risk FriendlyAccepts drivers with accidents/violations. Snapshot telematics available. Complaint ratio: 1.21
Allstate
Premium BrandDrivewise and Milewise programs. Strong agent network. Complaint ratio: 1.34
Texas-Specific Insurance Laws & Quirks
Credit Scores: Full Impact Allowed
Unlike states that ban or limit credit-based insurance scores, Texas allows insurers to use credit freely. Drivers with poor credit pay 84% more on average. This is one of the largest credit penalties in the nation.
Hurricane & Hail Zone Considerations
Texas leads the nation in hail damage claims. Comprehensive coverage is essential, especially in the DFW metroplex ("Hail Alley"). After a major storm, expect 2-4 week delays for claims processing.
UM/UIM Coverage: Offered But Optional
Texas requires insurers to offer Uninsured/Underinsured Motorist coverage, but you can reject it in writing. With 14.1% of Texas drivers uninsured, we strongly recommend keeping it.
PIP Coverage: Optional
Personal Injury Protection is optional in Texas. If you have good health insurance, you may not need it. But if you're self-employed or have a high-deductible health plan, PIP can cover immediate medical costs regardless of fault.
Modified Comparative Negligence (51% Rule)
Texas follows a "51% bar" rule. You can recover damages if you're 50% or less at fault, but your compensation is reduced by your percentage of fault. At 51%+ fault, you recover nothing.
How to Save on Texas Car Insurance
Shop every 6-12 months
Texas has no loyalty protections. Insurers often raise rates on existing customers while offering new customer discounts.
Take a defensive driving course
Texas-approved courses can save 5-10% on your premium. The course must be taken every 3 years to maintain the discount.
Bundle home/renters insurance
Multi-policy discounts of 10-25% are common. State Farm and Allstate offer the largest bundling savings in Texas.
Consider telematics programs
Progressive Snapshot and Allstate Drivewise can save up to 30% if you're a safe driver. But they track your location and driving habits.
Raise your deductibles
Increasing from $500 to $1,000 deductible can save 15-20%. Just make sure you have that cash available for a claim.
Frequently Asked Questions
Is Texas a no-fault state?
No, Texas is an at-fault (tort) state. The driver who causes an accident is responsible for damages. You can file a claim against the at-fault driver's insurance or sue them directly.
How long does a ticket affect my insurance in Texas?
Most tickets affect your rates for 3 years from the conviction date. A DUI stays on your driving record for 10 years and affects insurance for 5-7 years.
Do I need full coverage in Texas?
Legally, no—only liability is required. But if you have a loan or lease, your lender will require comprehensive and collision coverage until the vehicle is paid off.
What happens if I drive without insurance in Texas?
First offense: $175-$350 fine. Second offense: Up to $1,000 fine and license suspension. Texas also has a TexasSure program that verifies insurance status—driving uninsured will result in registration suspension.
Why is Houston car insurance so expensive?
Houston has high traffic density, severe weather (hurricanes and flooding), high uninsured motorist rates, and significant vehicle theft. These factors combine to make Houston one of the most expensive cities in Texas for car insurance.
Bottom Line: Texas Car Insurance
Texas offers competitive car insurance rates compared to national averages, but your credit score matters enormously here. If you have good credit and a clean record, GEICO and USAA (if eligible) typically offer the best rates.
Don't settle for state minimums—the $25,000 property damage limit is dangerously inadequate in 2025. We recommend at least 100/300/100 coverage, especially if you have assets to protect.
And if you live in the DFW area, comprehensive coverage is essential. One hailstorm can total your vehicle, and Texas averages more hail damage claims than any other state.