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Texas Car Insurance

Auto Insurance Basics in Texas

Fatal Car accidents are unfortunately prevalent in Texas. Almost 10% of the total annual fatalities occur in the Lone Star state. Texas is a very populous state and the majority of its people live in urban areas, mostly with the triangle outlined by Austin, Houston and Dallas. Urban areas have higher rates of crashes and vehicle vandalism that rural areas.

The Department of Transportation reports that there are around 6 million vehicular accidents reported to police departments every year. About 36,000 are killed annually in accidents and unfortunately that number is on the upswing after dropping for many years prior. Excessive speeding and driving while intoxicated are the estimated causes of about 50% of all traffic fatalities. Distracted drivers is a rising phenomenon. Safety professionals state that more and more accidents are occurring due to phone usage and texting. Millions of other Americans are injured every year in crashes.

The economic toll of these vehicular accidents, including lost productivity, measures a staggering $800 billion according to the National Highway Traffic Safety Administration. These numbers include the cost of injuries to people and damage to property. Being involved in a serious car accident can be a life changing event. Many injuries can be lifelong disabling conditions. And being at fault can be financially catastrophic if you are the cause of serious bodily injury or death.

Thankfully, in spite of the high number of annual accidents, the vast majority of Americans drive uneventfully every day. Car insurance is a financial mechanism for spreading risk across a pool of drivers. The underlying premise is this: pay a little now in return for a financial cushion in case something goes very wrong.

The most common car insurance product and the one required in virtually every state, including Texas, is liability insurance. Liability will pay for a third party’s bodily injury and property damage sustained in a car accident up to a certain point that is clearly delineated in your policy. A product called collision insurance will cover costs of repairing your own vehicle. Comprehensive insurance can cover your car for damages incurred by theft and weather. Keep in mind, that weather is an important factor in Texas. It is estimated that Hurricane Harvey damaged around 500,000 cars.

Drivers who have health insurance can use those policies to cover injuries sustained in an accident they have caused. But those policies may not cover everything. There is an auto insurance product called Personal Injury Protection that will help cover bodily injury expenses.

There are also other insurance add-ons you can get in Texas such as car rental reimbursement and roadside assistance. You can choose higher dollar value policies, which will come at a higher annual price, but give you extra protections in return. You can also choose a at least of few options of deductibles for your policy. A deductible is the amount your insurance company expects you to pay out of pocket first, before they start reimbursing you. The lower your deductible level, the higher your premiums will be. And the inverse is also true: you can lower your premiums by choosing a higher deductible level.

In sum, a car insurance policy is a contract in which a provider will cover certain car accident related costs specifically detailed in your individual policy, in return for your annual payments.

Texas Required Auto Insurance Coverage Minimum Liability Limits
Bodily Injury (BI) Liability $30,000 per person/$60,000 per accident
Property Damage (PD) Liability $25,000 per accident

Auto Insurance Requirements in Texas

Texas requires drivers have a minimal level of liability insurance of $30,000 for any bodily injury you may cause to a single person in an accident; $60,000 of minimum bodily liability in the event that you cause two or more people to sustain injuries in an accident; and $25,000 in minimum levels of damage to property. Most states require liability coverage for drivers and the minimum levels of Texas are about average. However, given the potentially expensive costs of a serious accident it is prudent to but as high a level of financial protection as you can practically afford.

Texas requires all insurers operating within the state to offer insurance against Uninsured or Underinsured motorists, but motorists are not obligated to purchase it. However, it is something you should seriously consider for you and your family.

Average Cost of Coverage in Texas

The average cost of car insurance in the state of Texas is a bit lower than the national average. A good driver carrying only the minimum level of liability coverage will pay, on average, just under $600 per year. Full coverage with a $1,000 deductible will be around $1,200 to $1,300. But these are averages. Your actual costs will be determined by your own personal factors.

In general, drivers with good credit will get discounts on their premiums, as will married drivers. Teenagers pay higher rates for coverage throughout the United States and it is no different in Texas. Your driving record will be a big determinant of your insurance costs. For example, a speeding violation can add over $100 annually to the costs of your policy and a DUI can add well over $700 to your yearly premiums.

Company Avg. Premium (annual)
Texas Farm Bureau $1,211
GEICO $1,303
Progressive $1,364
State Farm $1,507
Mercury $1,789
Encompass $2,175
21st Century $2,429
MetLife $2,921
Kemper Security $5,008

Unique Car Insurance Rules and Penalties in Texas

Texas is an At Fault state in terms of car insurance. This means that drivers must pay the costs for the accidents they they cause. In other words, if you hit someone, your insurance company will need to pay the injured party. In a No Fault state, each party looks to their own insurance company to reimburse expenses.

Driving without insurance is against the law in Texas. And the penalties are not trivial. For a first offense, you will not only be charged a fine of up to $350, you will also be on the hook for an annual surcharge of $250 in each of the following three years.

Fines Impoundment Driving Privilege Other
First Conviction Traffic Stop Penalties $175-350 plus an annual surcharge of $250 for three years
Second and Subsequent Conviction Traffic Stop Penalties $350-1,000 plus an annual surcharge of $250 for at least three years Vehicle can be impounded for 180 days; cannot apply for release of car without evidence of financial responsibility. Fee of $15 per day
First Conviction Traffic Collision Penalties $175-350 plus an annual surcharge of $250 for three years plus any damages for the accident you were in if you are liable Vehicle can be impounded for 180 days; cannot apply for release of car without evidence of financial responsibility. Fee of $15 per day File an SR-22 for three years after the accident and automatic suspension of vehicle registration and license for up to two years. 100% liable for other people's physical injuries and property damage for in an accident you caused
Second and Subsequent Conviction Traffic Collision Penalties $350-1,000 plus an annual surcharge of $250 for at least three years plus any damages for the accident you were in if you are liable Vehicle can be impounded for 180 days; cannot apply for release of car without evidence of financial responsibility. Fee of $15 per day Required to file a SR-22 for three years after the accident and automatic suspension of vehicle registration and license for up to two years. 100% liable for other people's physical injuries and property damage for in an accident you caused
Offense without a driver's license $2,000 Depending on severity, about 180 days in jail
Offense if you cause an accident with serious injuries or death: $4,000 maximum fine One year in jail

How to Get the Cheapest Rates in Texas

There are a many insurance companies operating in the Texas market so consumers have a wide range of options. With so many choices, and given the variable nature of auto insurance, it makes sense to get quotes from at least three providers in order to get your best price possible. Be a comparison shopper and you will doubtless save money. The online pricing tool at General.com will make it easy for you to see apples to apples quotes from as many vendors as you would like. You can really driver down your cost by being a savvy shopper.

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