Published: April 18, 2022Updated: July 29, 2022

What Is the Minimum Car Insurance Requirement in Texas?

Car insurance is a legal requirement in the Lone Star State.

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Liability coverage is the only required insurance in Texas, despite the fact that it’s a no-fault state. In this article, we’ll explain the minimum amount of car insurance you need to drive in Texas, and whether it’s really enough to protect you and your vehicle.

Minimum Coverage in Texas

Texas requires only liability coverage, which breaks down into bodily injury coverage and property damage coverage. Both cover damage to the other party’s medical costs and vehicle damage costs in the event you caused a car accident. Here are the minimum liability limits the Texas law requires:

  • Bodily injury: $30,000 per person; $60,000 per accident
  • Property damage: $25,0001

Is the Minimum Coverage Enough?

The minimum amount of coverage in Texas is not enough to protect drivers from a financial strain in the event of an at-fault accident. The average cost of solely property damage from a collision is $4,600; however, it raises up to $23,400 with a possible injury, $28,500 with an evident injury, $98,400 with a disabling injury, or over $1.7 million with a death.2

Therefore, we recommend obtaining $500,000 limits for both bodily injury and property damage coverage, along with these coverage options:

  • Collision coverage: Collision coverage encompasses damages to your vehicle from colliding with another. Your limit is your vehicle’s actual market value (AMV), so if your car is declared a total loss you’ll receive its AMV.
  • Comprehensive coverage: Comprehensive coverage includes damages to your car from incidents other than collisions, such as theft, hail, vandalism, or natural disasters. Similar to collision coverage, the limit for comprehensive coverage is your vehicle’s AMV.
  • Uninsured/underinsured motorist coverage: In case you get involved in an accident with a driver who does not have insurance — or their limits are too low — this coverage would go toward your injuries and damages. Your uninsured/underinsured motorist coverage should match your liability limit.
  • Personal injury protection: Personal injury protection (PIP) covers your medical bills in the event of an accident you caused, along with lost wages and childcare costs that you incurred as a result of the accident. We recommend $500,000 worth of PIP coverage, if possible.

DID YOU KNOW?

An estimated 8 percent of Texas drivers — totaling nearly 1.5 million3 — were uninsured in 2019, despite the legal requirement.

Who’s Covered?

In Texas — as in most of the United States — car insurance follows the car, not the driver.

New Car Purchase

If you buy a new car, you’ll need to either purchase a completely new policy or add the new vehicle to your existing insurance policy. While you can technically buy a car without insurance, you won’t be able to drive it off the lot until you show proof of liability coverage.

Borrowed Car

Some insurance policies include borrowed car coverage, meaning it covers anyone who drives the car with permission. Look for a permissive driver clause in the policy to ensure you’re not going to be liable for any damages or injuries.

Driving in Mexico

The majority of U.S. car insurance policies don’t cover driving in Mexico, even though it borders Texas. To gain coverage there, you would need to buy a policy specific to Mexico.4

Proof of Insurance

You need either digital or physical proof of insurance on hand whenever you’re driving in Texas. Otherwise, you could get in trouble for driving without insurance.

Penalties for Driving Without Proof of Insurance in Texas

  • First offense: Penalties include a $175-$350 fine (if you’re unable to pay, the court could reduce it to under $175) and/or a $250 surcharge for three years.
  • Second and subsequent offenses: Penalties include a $350-$1,000 fine and/or a $250 surcharge for three years, license or registration suspension unless you file and maintain proof of insurance until the second anniversary of the date of your second conviction, and impoundment of your vehicle for 180 days with a $15 daily fee (impoundment alone totals up to $2,700).5

Deductibles

Collision and comprehensive coverage, unlike your liability coverage, will include deductibles. This means that you’ll be responsible to pay your deductible before your coverage begins. Once you’ve reached your deductible, your insurance company will contribute money up to your limit.

FYI:

The average deductible is $500, although they can reach $2,000.

Learn more about deductibles.

Car Insurance Premiums in Texas

They say everything is bigger in Texas, and that includes car insurance premiums.

Average Cost of Car Insurance

On average, Texans pay 6 percent more than the rest of the U.S. at $1,143.85 annually, which breaks down into these coverages:

  • Liability: $650.17
  • Collision: $434.46
  • Comprehensive: $285.566

However, the cost of insurance in Texas ranges from $450 to $7,284.81 for new drivers. Consequently, the cost of car insurance varies by driving history and experience.

Factors in Insurance Rates

Here are some other factors that affect car insurance rates:

  • Size of deductibles: A higher deductible means lower premiums, but it’s a good idea to keep your deductible to what you could afford if you were in an at-fault accident.
  • Size of limits: Higher limits mean higher premiums.
  • Number of coverages: Add-on coverages cause premiums to increase.
  • Type of vehicle: Cars with a high purchase price are more costly to repair, so they’re more expensive to insure. Also, cars with the highest theft rate — such as Ford full-size pickups and Honda Civics — cost more to insure.7
  • Mileage: People who drive less pay less for insurance, especially if they opt for pay-per-mile insurance.
  • ZIP code: Residents in rural and suburban areas pay less than city-dwellers (residents of Houston or Dallas, for instance). Cities have higher rates of auto theft, vandalism, and accidents. Higher risk leads to higher premiums.
  • Tickets, at-fault accidents, and DUIs: People with poor driving records pay more for insurance than those with clean driving records.
  • Age: The cost of car insurance for a teen driver is higher than for any other age group, as young drivers have the least driving experience. Rates tend to decrease when residents turn 25.
  • Sex: Since men typically have higher fatality and DUI rates than women, men pay more for auto insurance in Texas.
  • Credit score: Consumers with good credit scores pay less for automobile insurance than those with low credit scores.
  • Marital status: Married couples pay less than single people (even if they’re only single because their spouse died).

Cheap Texas Car Insurance

Look to these providers for the cheapest car insurance in Texas:

  • Allstate
  • California Casualty
  • Chubb
  • Dairyland
  • Elephant
  • Esurance
  • GEICO
  • Mercury
  • Nationwide
  • State Farm
  • Texas Farm Bureau
  • Travelers
  • USAA

How to Save Money on Car Insurance in Texas

  1. Seek discounts. See what discounts your car insurance provider offers. If you drive a hybrid car, for example, you could be eligible for a 5 percent discount from Farmers.
  2. Bundle your policies. Bundle multiple policies together under the same provider, such as automobile and homeowners insurance.
  3. Lower your limits. Lowering your limits is an option to reduce costs as long as you still meet the state requirements.
  4. Request higher deductibles. Raising your deductible means your premiums will be lower. As long as you can actually afford to pay a higher deductible in the case of an accident, the short-term savings could be worth it.
  5. Drop coverages. You can also drop unnecessary coverages, like collision insurance on a car that doesn’t run, to save on insurance costs.

Texas Laws

Let’s brush up on some other car insurance laws in the nation’s second-largest state. 

Cancellation and Non-Renewal Laws

If your insurance carrier wants to cancel or not renew your policy, it must let you know a certain period of time before the expiration date.

  • Cancellations, including for nonpayment: 10 days
  • Non-renewals: 30 days

Teen Driving Laws

Teens driving in Texas will be part of the Graduated Driver License (GDL) program, which has two phases.

  • Phase one: You have either a valid learner’s permit or a minor-restricted driver’s license, also known as a hardship license, for six months before you graduate to a provisional Class C license. If your learner’s license is suspended during phase one, this six-month period increases by the number of days of the suspension.
  • Phase two: You have had a learner’s permit or hardship license for six months, completed your classroom and behind-the-wheel driver education (including the Impact Texas Drivers program), and passed the driving test. If you are 16 or 17, you cannot drive with more than one passenger under age 21 unless they’re a family member. You also can’t drive between the hours of midnight and 5 a.m., unless it’s necessary for work, a medical emergency, or to attend a school-related activity. As a minor, you are also restricted from using any wireless communication devices while driving, even handheld devices, unless it’s an emergency.8

No-Fault State

Texas is a no-fault state; therefore, in an accident, each party is responsible for their own medical costs. Still, the at-fault driver is responsible for property damage. Learn more about liability vs. no-fault states.

Registration Information

You need car insurance to register your car in Texas, whether it’s a new registration or a renewal.

How to Register a New Car in Texas

  1. Have your vehicle inspected. Take your car and insurance card to a certified Texas Department of Public Safety inspection station.
  2. Visit your county tax collector. Bring your insurance card, proof of inspection, and proof of ownership to your local tax assessor’s office.
  3. Pay the fee. You’ll owe at least $51.75, depending on your county.

How to Renew Your Texas Registration

  1. Get your car inspected. You’ll need to get your car inspected at a certified station before you can renew your registration.
  2. Renew online. You can renew your registration up to 80 days before it expires or, if you haven’t been cited for an expired registration, up to 12 months after the expiration date. Save $1 by registering at https://renew.txdmv.gov/Renew/RegistrationRenewalServlet.
  3. Renew by mail. Send your renewal notice, a copy of your vehicle inspection report (from https://mytxcar.org), proof of your current liability insurance, and the fees listed on the renewal notice to your county tax office.
  4. Renew in person. You can renew in person at any county tax office or approved substation. Simply bring your registration renewal notice and proof of insurance.
  5. Pay the fee. See below for the fees to renew your registration.
Vehicle type Weight (in pounds) Registration fee
Mopeds and motorcycles Any $30
Trailers Up to 6,000 $45
Cars and light pickup trucks Up to 6,000 $50.75
Pickup trucks 6,001-10,000 $54
Heavy trucks 10,001-18,000 $110
Heavy trucks 18,002-25,999 $205
Heavy trucks 26,000-40,000 $340
Heavy trucks 40,001-54,999 $535
Heavy trucks 55,000-70,000 $740
Heavy trucks 70,001-80,000 $840
Heavy trucks Over 80,000 Varies9

Recap

Texas may be the second-biggest state, but it’s not so big when it comes to car insurance requirements. You can get away with liability coverage on its own if you’re looking to save money. Of course, we recommend full coverage. Learn more about car insurance in Texas, or read our car insurance FAQs for more information.

Citations

  1. Automobile insurance guide. Texas Department of Insurance. (2022).
    https://www.tdi.texas.gov/pubs/consumer/cb020.html

  2. Costs of Motor-Vehicle Injuries. National Safety Council Injury Facts. (2022).
    https://injuryfacts.nsc.org/all-injuries/costs/guide-to-calculating-costs/data-details/

  3. One in Eight Drivers Uninsured. Insurance Research Council. (2021, Mar 22).
    https://www.insurance-research.org/sites/default/files/downloads/UM%20NR%20032221.pdf

  4. Does My Car Insurance Cover Me In Canada And Mexico? GEICO Living. (2022).
    https://www.geico.com/living/saving/your-policy/does-my-car-insurance-cover-me-in-canada-and-mexico/

  5. Transportation Code: Title 7. Vehicles And Traffic – Subtitle D. Motor Vehicle Safety Responsibility – Chapter 601. Motor Vehicle Safety Responsibility Act. Texas Statutes. (1995, Sep 1).
    https://statutes.capitol.texas.gov/Docs/TN/htm/TN.601.htm#601.001

  6. 2018/2019 Auto Insurance Database Report. National Association of Insurance Commissioners. (2022).
    https://content.naic.org/sites/default/files/publication-aut-pb-auto-insurance-database.pdf

  7. NICB Releases Annual ‘Hot Wheels’ Report: America’s Top Ten Most Stolen Vehicles. National Insurance Crime Bureau. (2021, Oct 12).
    https://www.nicb.org/news/news-releases/nicb-releases-annual-hot-wheels-report-americas-top-ten-most-stolen-vehicles

  8. Graduated Driver License (GDL) Program. Texas Department of Public Safety. (2022).
    https://www.dps.texas.gov/section/driver-license/graduated-driver-license-gdl-program

  9. Register Your Vehicle. Texas Department of Motor Vehicles. (2022).
    https://www.txdmv.gov/motorists/register-your-vehicle