Texas Car Insurance Laws

Understanding Texas car insurance laws will help you ensure that you have the right coverage for your car.

Minimum Insurance Requirements in Texas

The minimum insurance coverage in Texas is as follows:

• $30,000 in bodily injury per person
• $60,000 in bodily injury per accident
• $25,000 in property damage per accident¹

You may see this written as 30/60/25 coverage, an abbreviated version of the minimum liability coverage, such as bodily injury and property damage liability car insurance coverage. Uninsured/underinsured motorist coverage is not required, nor is rental car coverage, which entails the insurer paying for a rental car if yours is in the shop under a covered claim.

Driving Without Insurance Penalties

While Texas imposes a $175 penalty on drivers that don’t have insurance, this penalty is not as stiff as other states like Pennsylvania, where you pay a $300 fine and get your license and registration suspended.

Fault System

Texas is an at-fault state. Being in an at-fault state means that if an accident is your fault, your bodily injury liability pays for the injuries of the other party, and your property damage liability pays for the damages to the other vehicle or property. Personal injury protection is elective, which means that you would cover your own injuries if another vehicle hits you rather than rely on their bodily injury liability protection.

Other Laws

There are other laws pertaining to drivers in Texas when it comes to auto insurance:

• Cancellation and nonrenewals: Insurance companies have 10 days to notify you of a cancellation and 30 days to notify you of a nonrenewal, prior to the expiration date.
• Statute of limitations for claims: You have two years to file a claim for either property damage or bodily injury after an accident.

Beyond the minimum required insurance coverages, you may want to add other coverages to be fully insured. Full coverage includes comprehensive, collision and personal injury protection (PIP) coverage:

• Comprehensive coverage: Comprehensive coverage pays for replacements or damages to your car in incidents that don’t involve collisions with other cars. Examples of comprehensive coverage include tree branches falling on your car or someone stealing or vandalizing your car.
• Collision coverage: Collision insurance pays for damages to your car when you are responsible for hitting another car or object or when another party who hit you doesn’t have high enough limits to cover your losses.
• PIP: PIP pays your medical bills if you are in an accident, regardless of whose fault the accident is.

In 2020, the National Association of Insurance Commissioners (NAIC) reported that the average car insurance expenditure in Texas was $1,085 per year.²

Texas is not known to have the cheapest car insurance rates. It ranks with the NAIC data as being the 16th-highest rate in the nation. So while it’s better than some, you will have to do some shopping to get the cheapest Texas rates.

What Affects Rates

When shopping for car insurance, it is important to understand that many factors will affect your rate, including:

• Credit: Texas is a state that allows insurance carriers to use credit in underwriting policies. The higher your credit score, the lower your insurance rate will be and vice versa.
• Gender: Statistically, men get into more accidents than women and thus pay more for insurance, generally.
• Location: Your address plays an important role in an insurance company rating your policy. Certain areas are more prone to accidents and incidents, such as theft, than others. Drivers in high-risk areas pay more for insurance.
• Coverage options: Getting more than the minimum coverage required will lead to higher insurance rates.
• Deductibles: Choosing higher deductibles means paying less for insurance because you are willing to pay a higher amount after a loss.
• Age: Younger drivers with less experience are higher-risk drivers and pay more for insurance than more experienced, older drivers.
• Driving history: Drivers with more tickets or accidents on their records will pay more for insurance, as they are high-risk drivers.
• Annual mileage: Those who drive more are at a greater risk of accidents and will pay more for insurance than those with low annual mileage records.

Texas requires all registered vehicles to obtain annual inspections from licensed inspection facilities. These inspections go over safety points and may also include emissions tests. Vehicles that are gas-powered must get emissions tests, with the exception of diesel-powered vehicles and motorcycles.³ The cost of the safety inspection is $7, and the cost of the emissions test ranges from $11.50 to $25.50, depending on what county you live in.

Texas takes texting and other cell phone use while driving very seriously, as using a device while driving is dangerous. The law prohibits teen drivers under the age of 18 from using cell phones while driving at all, while all drivers have a texting ban, regardless of age.⁴

Penalties

The penalties can be stiff if the courts convict you of texting and driving in Texas more than once or if your distracted driving caused an injury or death.

Texas drivers must adhere to the at-fault state laws when it comes to insurance. If you’re ready to buy auto insurance, check out our guide for the best Texas auto insurance. Get the coverage you need with the options you want for the best possible price.