Introduction
Why Is Car Insurance So Expensive in Texas?: Moving or living in Texas may come as a shock; car insurance costs more here than anywhere else nationally ($1056), according to data provided by the National Association of Insurance Commissioners. The annual premium average in 2019 for Texas was roughly $1109 according to NAIC records. So why is car insurance so costly in Texas and what factors impact its price? In this article, we explore why Texas rates may be so high and what strategies exist for lowering them.
Factors That Contribute To Expensive Car Insurance in Texas
There are various factors that play into the cost of auto insurance in Texas, including:
Texas ranks second-largest among states for population density, trailing California only. Most Texans live in urban areas which experience increased levels of traffic accidents, theft and vandalism that lead to higher claims costs for insurance providers resulting in higher premiums for drivers.
Texas stands out among states by boasting an exceptional highway density and long roads, which means drivers spend more time sharing the road with one another and increasing risk. Dense traffic areas increase crashes and accidents – an increased likelihood, according to insurance providers, increases costs as well.
Texas stands proud amongst states as having an above-common vehicle robbery charge while as compared with the relaxation of America, consistent with FBI estimates. A total of 68,546 motor vehicle thefts were reported in Texas during 2019 according to their findings–second only behind California–with increased cost associated with claims and losses leading to higher premiums for drivers as a result.
Texas gives a number of the very best velocity limits nationwide, permitting as much as eighty five mph on positive highways. Increased speed limits increase speeding rates and fatal accidents as well as claims and loss costs for insurance companies and drivers.
Texas changed into devastated in 2017 through herbal failures like hurricanes, floods, wildfires, hailstorms and tornadoes which ended in enormous belongings and automobile damages resulting from hurricanes, flooding, wildfires, hailstorms or tornadoes. These disasters resulted in extensive property and car losses as a result. These natural events resulted in extensive property and car damage as a result. Insurance claims increased significantly following Harvey in 2017 according to MoneyGeek1, as rates in Texas went up an astounding 8 percentage points as reported by MoneyGeek1. MoneyGeek1 noted this spike as well.
Liability Coverage Requirements in Texas: Texas has higher liability coverage requirements than most states, to compensate victims and property in an accident caused by you. Liability coverage provides payment for damage done to other people or their properties caused in an accident caused by you; in Texas, this minimum amount includes bodily injury liability of $30K/$60K for bodily injuries per incident as well as property damage liability coverage at $25000 per incident (also written as 30/60/25); this compares with 25/50/20 in national average requirements and higher premiums will follow suit accordingly.
Texas boasts an above-average uninsured driver rate: According to the Insurance Information Institute, 14.1% of drivers were uninsured in 2019 versus 13% nationally; uninsured motorists pose greater claims and losses risks for insurance companies and drivers carrying uninsured/underinsured motorist coverage; this type of protection pays out damages and injuries caused by drivers without adequate or sufficient coverage if someone hits them without enough or any insurance at all.
How to Save on Car Insurance in Texas
Car insurance premiums in Texas can be expensive due to factors beyond your control; however, there are steps you can take to lower premiums and save money such as:
Compare Quotes from Different Insurance Companies:
One effective strategy to save on car insurance is by shopping around and comparing quotes from multiple insurers until you find one with coverage options and rates best tailored for you and your budget. Using online tools or agents as guides for comparison shopping will assist in this endeavor.
Bundle Your Policies:
Bundling multiple policies together is another effective way of saving on car insurance premiums and claims processes. For instance, bundling home/renters/car coverage with one insurer could net you discounts on both policies combined. It will also simplify billing/claims procedures.
Increase Your Deductible:
By increasing the deductible amount agreed to pay out-of-pocket before insurance kicks in for claims filed, raising it can lower premiums as taking on more financial responsibility for potential losses may lower them; just ensure you can afford this higher deductible should an accident happen!
Reduce Your Coverage:
For older cars worth less than $5,000, dropping optional coverages like collision and comprehensive may make sense if something should happen that damages it; just remember that doing this means paying out-of-pocket should anything go wrong with it. However, be wary as dropping these protections means covering repairs or replacement yourself should anything occur that compromises it.
Improve Your Credit Score:
Your credit score has an effect on car insurance rates in Texas as insurance companies use it as a factor for risk level determination and premium determination. A higher credit score signals more timely payments of bills as well as reduced claims filing which reduces both risks and premium costs; to do this you could pay your bills on time, reduce debt payments as well as review your report for errors or fraudulent activity in order to strengthen it and boost it further.
Driving safely will save money on car insurance in Texas; insurers recognize safe drivers by offering lower premiums and discounts for safe driving habits. Take a defensive driving course or install a telematics device into your car as proof of this behavior to get discounts from some insurers.
Check for discounts:
Your Texas auto insurer might offer additional discounts that you are eligible for depending on their policies and your profile, including:
Multi-car discount:
By insuring multiple vehicles with one insurer, you may qualify for a discounted premium on each of them.
Good Student Discount: Students under 25 who maintain good grades in school may be eligible to get a discounted premium rate.
Military discount:
As active or former military members – and their family members – you could qualify for a discount in premium.
Senior Discount:
If you are over 55 and possess an impeccable driving history, an additional discount on your premium may apply to you.
Low mileage discount:
If your driving is less frequent than average, a discount could apply as you’re less likely to have accidents and collisions with vehicles on the roads.
Anti-theft Discount:
When installing an anti-theft device such as an alarm or tracking system in your car, such as an alarm or tracking technology, the premium can be discounted because your risk of theft has reduced significantly.
Conclusion
Car insurance premiums in Texas can be costly for several reasons that increase risk, with claims and losses both increasing for insurance companies and drivers alike. By shopping around for policies to bundle together and raising or lowering deductibles/coverage levels; improving credit scores; driving safely / asking about discounts you could lower premiums and save money with auto coverage in Texas.
