Dallas is the fourth largest metropolitan area in the United States, and the third largest city in Texas. Altogether, Texas has the second largest number of licensed drivers of any state in the country, with over 13 million drivers. Because Dallas is geographically much larger than other major cities throughout the country, drivers spend more time on the road each day than they would in a more compact city like Manhattan. As with most large cities, Dallas has higher rates than rural communities, making the search for affordable car insurance even more important.

Why are car insurance rates higher in Dallas?

Car insurance companies base their rates on dozens of factors, from the make and model of the insured vehicle to the age and marital status of the driver. Generally, insurance companies are interested in determining how likely a driver is to be involved in a car accident. The higher the probability of an accident occurring, the higher rates will be to compensate.

Many car insurance rates are determined individually based on a person’s driving history. Some factors, however, are based on a driver’s geographic location. Quotes vary not only from one state to the next but also by city and even postal code. If you live in an affluent neighborhood with low crime, for example, your insurance will be less expensive than if you live in an inner-city urban neighborhood with a higher incidence of theft and vandalism.

In the case of large cities, several factors are included that determine insurance rates. First, large cities will tend to have a higher incidence of crime; theft and vandalism in particular are highly important to car insurance providers, as claims are often filed for vehicles damaged in this way. Additionally, large cities account for long commutes and heavy traffic. Because accidents are much more likely to occur in areas of congested traffic, insurance rates will be higher. Additionally, multiple-car accidents happen more frequently in large cities with bumper-to-bumper rush-hour traffic.

Dallas is the third most congested city in the country, and features an average driver commute of 27 minutes. This commute time is slightly higher than the national average. The necessity of drivers to commute through crowded highways is responsible for Dallas car insurance rates being somewhat higher than they would be in rural Texas. Dallas is also ranked in the top 50 cities for car thefts.

Weather also plays a role in car insurance rates. Since auto insurance covers damage caused by weather events such as tornadoes and hail, areas with a higher incidence of inclement weather will be subject to higher premiums than other locations. Dallas has fairly extreme weather when compared to other more coastal cities; ice storms are not uncommon in the winter, and tornadoes and hail occur frequently in the summer.

Required Car Insurance Coverage in Texas

The state of Texas requires all drivers to purchase a minimum of 20/40/15 liability coverage. This means that you need to purchase $20,000 worth of bodily injury liability per person ($40,000 per incident) and $15,000 in property damage liability insurance. Liability coverage insures that you pay for injuries and damage that you cause in a car accident.

Bear in mind that the state minimum may not be enough to cover your needs. It’s very easy to use $15,000 in property damage liability coverage in a single accident, especially if there are multiple cars involved. Most insurance policies have much higher limits of up to $100,000 for property damage and $300,000 for bodily injury liability.

Of course, the higher the limits of your liability coverage, the lower your premium. If you are involved in a car accident causing more damage than your insurance can pay, however, you will need to pay the remainder out of your pocket. Being unable to pay for an auto accident can damage your credit score and even lead to your license being suspended.

When you buy car insurance in Dallas, you may also wish to purchase collision and comprehensive coverage. These pay for damage to your vehicle when it’s involved in an accident, theft, vandalism or natural disaster. Additional coverage available in Texas includes uninsured motorist coverage, which pays for damage caused to your vehicle by a driver without insurance; rental reimbursement coverage, which pays for alternate transportation while your car is in the shop; and personal injury protection, which pays toward your medical expenses if you are injured in a car accident.

Top 10 Dallas Insurance Companies

Nationally, there are several major insurance companies that provide auto insurance for the majority of private insurance needs. There are also several smaller, local insurance companies operating in the Dallas area that may be able to provide you lower premiums than the major providers.

1. State Farm. The largest insurer in the country, State Farm carries over twice as many policies as any other insurance company. The company was founded in 1922 as a mutual insurance company, meaning that the policyholders also held shares in the company. Originally intended as an insurance company to protect the assets of farmers, State Farm expanded to pay for private and commercial insurance. State Farm is also a powerful financial institution and lender. State Farm is fairly unique among other insurance companies in that nearly all facets of a claim are handled through the insurance agent, rather than between the insured and the claims department directly. This means that State Farm hires many more agents than most other companies.

2. Farmer’s. The second most popular company for Texan insurance holders, Farmer’s is actually located in Zurich, Switzerland. In addition to vehicle insurance, Farmer’s also offers home, life and other types of insurance policies. They are also a financial institution that provides such services as mutual funds and annuities. As with State Farm, its popularity in Texas may be due to the agricultural angle the company was founded on.

3. Progressive. Located in Austin, Texas, Progressive is a rapidly-growing insurance company founded in 1937. Unlike other companies, Progressive focuses entirely on auto policies and personal-liability; there is no Progressive home insurance.

4. GEICO. Officially named Government Employees Insurance Company, GEICO has been selling personal auto policies to individuals since the late 1970s. In the past decade, GEICO’s advertising strategy has become focused on securing customers from the direct market, leading the company to be one of the most well-known names in car insurance.

5. Allstate. Carrying roughly half the number of policies of State Farm country-wide, Allstate insurance is the second-largest insurance company nationally but the fifth most popular in Texas. Allstate insurance began as a part of the Sears, Roebuck and Co. in 1931, and became independent in 1993. Like State Farm, Allstate primarily deals through its agent support staff, but in recent years has begun to put more focus on direct sales through its website and 1-800 number.

6. USAA. United Service Automobile Association insurance is offered specifically to individuals who have served in the US military, or their families. In addition to insurance, USAA provides financial services such as banking, credit cards and various types of investments. The company headquarters is located in San Antonio, Texas.

7. Home State County Mutual Insurance Company. This company has been providing auto insurance in Texas for 60 years; as a mutual company, the clients invest in partial ownership of the company. Home State County Mutual is unique in that it is Texas-specific.

8. Consumers County Mutual Insurance Company. Another mutual company, this business is located out of Dallas, Texas and is the eighth most popular insurance provider in the state. Consumers County Mutual provides coverage for automobiles, boats and other vehicles but does not carry homeowner’s insurance.

9. Texas Farm Bureau Casualty Insurance Company. Located in Waco, Texas, this company incorporated quite recently but already holds a large number of policies throughout the state. In addition to auto coverage, Farm Bureau provides insurance targeted to farmers and ranchers, including protection for livestock.

10. Southern County Mutual Insurance Company. Operating out of Dallas, Texas, Southern County Mutual provides underwriting to several companies, including The Hartford Company.

Overall, popular car insurance companies in Dallas range from the largest insurers in the nation to smaller private insurers throughout Texas. The state’s strong agricultural roots are evident in the popularity of insurance companies related to farming, and a degree of state pride is evident in the number of popular insurance headquarters located in the state.

Ultimately, the best way to determine what car insurance company you should use is to search for quotes until you find one that matches your needs. You can visit a local agent or contact a customer service representative online to get an idea of what the company is like. In some situations, agencies will support multiple different companies, so you may be able to move from one company to the next without changing your agent.