Texas is the second-largest state in the country and also has the second largest population of licensed drivers of any state. There are approximately 13 million drivers in Texas and a per capita rate of nearly one car for every two people. Despite the state’s size and population, auto insurance is surprisingly affordable in Texas, ranking 27th in the nation for insurance. The average insurance policy in Texas costs approximately $1,492 each year. Of course, your own car insurance premiums may be higher or lower than the average depending upon your driving history and the type of coverage you choose on your policy.

What factors influence auto insurance costs in Texas?

Several factors contribute to the cost of car insurance in any particular area: the weather, the population, the quality of public transportation, the size of the state and its crime rate. Some, such as a location’s weather, are purely geographic; others are directly related to the driving behavior of the state’s population. This means that insurance costs can fluctuate as driving habits change in an area.

One major element in determining auto insurance costs is the rate of uninsured motorists in an area. Whenever a person without insurance causes a car accident, the cost of repairs must be absorbed by the other insurance company. This causes that company to lose money that must then be recovered through rate increases. Areas with a high incidence of uninsured drivers will have higher insurance premiums than those with a low number of uninsured drivers.

Texas has a moderate rate of drivers without insurance, approximately 15 percent. While many areas do have much lower rates of uninsured motorists, Texas has one of the lowest rates in the area; neighboring New Mexico has a 26 percent uninsured rate, and Oklahoma has a 24 percent rate of uninsured drivers.

Another major influence on auto insurance rates is drunk driving. Alcohol-related accidents account for many of the most serious auto collisions each year, so areas with high numbers of DUIs will have high insurance rates to compensate for this risk. Drunk driving is an issue in Texas; it ranks 5th in the nation for drunk driving incidents, trailing behind Hawaii and Montana. In 2008, Texas had 1,463 DUI-related fatalities.

Automobile theft is a concern in Texas. As a state, Texas has the second highest incidence of auto theft in the country; no city in Texas made the top 10 list of most theft-prone cities, however. The state’s proximity to Mexico and large population are the major factors in the high incidence of theft.

Texas Car Insurance Requirements

To register a vehicle in Texas, you must carry liability insurance on that vehicle that meets the state’s minimum limits of liability. You must carry at least $25,000 worth of property damage liability insurance and $30,000 of bodily injury liability per person, up to $60,000. While these limits are higher than minimum insurance limits in other states, it’s a good idea to carry more liability insurance if you can afford it. Serious accidents or those involving multiple vehicles can quickly exhaust your liability limits, and you will be responsible to pay the remainder out of your pocket. This can damage your credit and even lead to your driver’s license being suspended if you are unable to pay for a claim promptly.

You may also wish to purchase first-party insurance such as collision and comprehensive. This type of coverage pays for damage that your vehicle sustains. Full coverage auto insurance is required for vehicles that are leased or financed, and you may wish to maintain full coverage on any new or valuable vehicle that you own outright as well.

Texas also offers uninsured motorist coverage both for injuries and vehicle damage. This coverage pays for an accident caused by another driver who does not have insurance. In Texas, you also have the option of using your uninsured motorist coverage instead of collision to pay for damage caused in a hit-and-run accident. The Uninsured motorist coverage usually has a lower deductible, but doesn’t have to. Because the coverage is designed to replace another person’s liability insurance, it will usually have the same limits as your liability insurance.

Moving to Texas?

Whenever you move to Texas from a neighboring states, your rates may decrease. If your insurance premiums are still too high, you can speak with your insurance agent to see if there are any discounts you might qualify for. Some companies will offer discounts for safe drivers or customers who carry multiple lines of insurance through a single company. You can also usually receive a discount on your car insurance if you install an anti-theft device in your vehicle.

Whether you’re moving to Texas or simply searching for cheaper car insurance, you can begin your search online by obtaining a free insurance quote. Once you’ve chosen a company, you can discuss your policy with the customer service department or a local agent in order to decide on the best coverage to suit your needs.