Texas Car Insurance Requirements: What You Should Know
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Written byAmy Beardsley
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Amy Beardsley is a seasoned insurance expert who’s been writing for Compare.com since 2023. She has more than 12 years of industry knowledge and expertise in auto, home, life, commercial, and other insurance products. Amy’s work has been published by Berkshire Hathaway Specialty Insurance, Legal & General, NerdWallet, Robinhood, Insurify, NEXT Insurance, and more.
Amy worked as a court administrator before becoming a content marketing writer. Her legal background has equipped her with the ability to simplify complex technical language into easy-to-understand content.
She graduated magna cum laude from Ferris State University, where she earned a Bachelor of Science in Business Administration and Legal Studies.
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Edited byLequita Westbrooks
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Lequita WestbrooksSenior Editor
Lequita Westbrooks is an insurance editor at Compare.com. Her writing and editing experiences span several industries, including insurance, personal finance, higher education, and more. She excels at explaining complex topics like auto insurance in simple, easy-to-understand language and is passionate about helping readers save money. Lequita graduated from the University of South Florida, where she earned her Bachelor’s degree in English.
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Table of contents
Car insurance costs vary significantly across the United States. But everything is bigger in Texas, including car insurance premiums. After a 15% average rate increase for full-coverage policies in 2024, rates in Texas continue to climb.[1] That means understanding your insurance needs has never been more crucial.
The recent surge in costs, combined with the Lone Star State’s fault-based insurance system, highlights the importance of having proper Texas car insurance coverage. If you’re the at-fault driver in an accident, you face not just insurance claims but potentially significant lawsuits.
Fortunately, although Texas’ average auto insurance rate — $177 per month — is higher than the national average, you can find basic coverage that satisfies the state’s requirements for as little as $40.
Here’s what you need to know about auto insurance requirements in Texas.
Texas Auto Insurance Requirements Explained
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Texas drivers must prove they can pay for damages resulting from an accident they’ve caused. Liability insurance is the most common way drivers meet that requirement.
Texas law currently requires all drivers to have a policy with at least 30/60/25 coverage.[2] That means:
$30,000 in bodily injury liability (BI) coverage per person
$60,000 in bodily injury liability per accident
$25,000 in property damage liability (PD) coverage
What these limits mean
Bodily injury liability covers any injuries you cause to other drivers or their passengers. That means you have coverage for one person’s medical bills up to $30,000, with a maximum of $60,000 for all the injuries you cause.
Property damage liability, on the other hand, is just what it sounds like. It pays for any damages you cause to other people’s property — anything from other vehicles to fences, mailboxes, guardrails, and more. As you can probably imagine, $25,000 doesn’t go a long way these days with the rising costs of new vehicles, so you probably want to consider higher limits if you can afford them (more on that later).
Are these limits enough?
A minimum-coverage policy isn’t likely to provide enough coverage unless you’re in a minor fender bender. The basic limits could fall short in scenarios like multi-vehicle collisions or if you’re responsible for totaling another driver’s car.
For instance, if you’re in an accident resulting in severe injuries or death, or if another driver sues you for damages beyond your coverage limits, you could be financially vulnerable. Even owners of luxury vehicles could find the minimum requirements for coverage insufficient for repairs or replacements.
The Texas Department of Insurance (TDI) suggests considering higher limits to provide a better financial safety net if you get into a significant accident. It’s also worth noting that lenders will require you to add comprehensive and collision coverages to your policy if you finance or lease your vehicle.
What Happens If You Don’t Meet These Requirements?
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The specific coverage limits mentioned above aren’t just suggestions — you must meet them to legally drive on Texas roads. If the police or Texas DMV find out you’re driving without insurance, you could face steep fines and other punishments.
If you’re one of the 20% of Texas drivers hitting the road without insurance,[3] understand that you’re facing the following penalties.
Fines and other fees
First offense: $175–$350 fine[4]
Subsequent offenses: $350–$1,000 fine
License or registration reinstatement fee: $100
Vehicle impounding
You could have your vehicle impounded for 180 days if a court convicts you of driving without insurance.[5] After that time, you’ll need to provide proof of insurance to retrieve your vehicle.
You’ll also have to pay an additional fee of $15 for each day your vehicle sits in the impound lot — a minimum of $2,700 total.
License penalties
If the court convicts you of driving without insurance a second time, it may suspend your driver’s license and vehicle registration for two years from the date of your conviction. Once that two years is up, you’ll have to pay the $100 reinstatement fee mentioned above and provide proof of finance responsibility via an SR-22.
SR-22 requirements
Several situations can lead to the state requiring you to file a “financial responsibility insurance certificate” — also known as an SR-22. This form — which your insurance company will typically file on your behalf — proves to the state of Texas that you’re fully meeting its liability insurance requirements.
After a second conviction of driving without insurance, you’ll need to have an SR-22 on file for two years.[6] If you don’t meet these requirements, you could face yet another license and registration suspension.
Higher insurance rates
On top of the state-imposed penalties outlined above, you’ll also face significantly higher auto insurance premiums if you’re caught driving without insurance. For example, our data shows that Texas drivers can expect to pay more than 10% higher premiums with an SR-22 requirement.
Perhaps the worst part is that these rate increases will last for several years — potentially costing you thousands of dollars in the long run.
At the end of the day, maintaining basic liability coverage is much cheaper than what you’d pay if authorities catch you driving without insurance.
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Other Types of Coverage to Consider
Many drivers should consider adding additional auto insurance coverage for greater protection. The table below shows the different optional car insurance coverages available to Texas drivers. It also lists what each type covers to help you determine if it’s a good fit for you.
For instance, uninsured/underinsured motorist coverage is one option. In Texas, insurers must offer it when you purchase a policy, though it’s not mandatory. But it’s a good idea, considering 12% of motor vehicles in Texas aren’t covered by an auto insurance policy, according to the TDI.
Optional Coverage | What It Pays For |
|---|---|
| Collision coverage | Damage to your vehicle from a collision, regardless of fault |
| Comprehensive coverage | Non-collision-related damage to your vehicle, such as theft or natural disasters |
| Medical payments coverage | Medical expenses for you and your passengers after an accident, regardless of fault |
| Personal injury protection (PIP) | Medical bills, lost wages, and caregiver costs, regardless of fault |
| Uninsured/underinsured motorist | Costs from an accident with a driver that has little or no insurance |
| Towing and labor | Towing and roadside incidents like running out of gas or having a flat tire |
| Rental reimbursement | Rental car fees while your vehicle is being repaired |
As you consider these optional coverages, it’s also important to be aware of specific Texas car insurance laws that could affect your decisions and responsibilities as a driver. Let’s dive into these laws in more detail.
Other Texas Car Insurance Laws
Car insurance laws are in place to ensure you have adequate protection on the road. It’s crucial for you to understand Texas auto insurance laws to make sure your policy meets the state’s requirements and protects your finances.
Texas Automobile Insurance Plan Association
If you’re struggling to find a car insurance company in Texas to insure you because of a poor driving record or you’re considered “high risk” for other reasons, you have options. If two auto insurers have denied you coverage in the last 60 days, the Texas Automobile Insurance Plan Association (TAIPA) can get you the state-required coverage.
Diminished-value claims
The concept of diminished-value claims means a vehicle’s worth after being repaired is lower than before, even if it’s restored to its pre-accident condition. Drivers in Texas who aren’t at fault for an accident might be able to file a diminished-value claim to recover the difference, but this isn’t guaranteed.
Insurers aren’t obligated to pay for diminished-value claims, but policies and practices can vary between insurance companies, according to the TDI. It’s important to ask your insurance company for more information to determine if your policy includes it.
Other Ways to Prove Financial Responsibility
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“Financial responsibility” is how Texas refers to your ability to cover costs from accidents you may cause. Typically, this is proven with liability insurance, but in Texas, a few alternative methods are available to demonstrate financial responsibility beyond traditional insurance. Here’s how.
Cash deposit
In Texas, drivers can make a cash deposit with the county judge as an alternative to traditional insurance. The deposit must be in cash or as a cashier’s check and equal or exceed the state’s minimum liability coverage amounts.
Surety bond
Another option for proving financial responsibility is through a surety bond. This requires you to get a certificate from the Department of Public Safety showing you have a bond on file in an amount that’s at least as much as Texas’ minimum coverage requirements.
Certificate of self-insurance
Being self-insured means you have sufficient resources to cover any liabilities arising from car accidents. A certificate of self-insurance is only available for companies that own and register 26 or more vehicles. You can get it from the Department of Public Safety, and it proves you’re compliant with Texas’ financial responsibility laws.
How Much Does Car Insurance Cost in Texas?
The cost of car insurance in Texas varies based on many factors, including coverage type. Liability insurance — the minimum legal requirement — covers damages to others in an accident you cause. Full-coverage insurance, on the other hand, provides more protection and includes liability along with comprehensive and collision coverage for your vehicle.
On average, liability insurance costs $122 per month, and full coverage averages $233 for Texas drivers, according to our data. Keep in mind that drivers with less-than-perfect records may pay higher rates due to increased risk factors.
The table below lists the most affordable car insurance companies in Texas, according to our research.
The below rates are estimated rates current as of: Saturday, February 1 at 11:00 AM PST.
Company ▲▼ | Average Monthly Premium ▲▼ |
|---|---|
| State Farm | $40 |
| GEICO | $43 |
| Allstate | $56 |
| Mile Auto | $61 |
| USAA | $71 |
| Nationwide | $89 |
| Mercury | $92 |
| Root | $97 |
| Progressive | $111 |
| Dairyland | $115 |
| Safeco | $118 |
| Chubb | $120 |
| Clearcover | $131 |
| National General | $132 |
| Direct Auto | $133 |
| The General | $133 |
| AssuranceAmerica | $136 |
| Bristol West | $137 |
| 21st Century | $139 |
| Commonwealth Casualty | $140 |
| Elephant | $153 |
| GAINSCO | $170 |
| Foremost | $227 |
| Liberty Mutual | $230 |
| State Auto | $266 |
Disclaimer: Table data sourced from real-time quotes from Compare.com's 50-plus partner insurance providers and quote estimates from Quadrant Information Services. Actual quotes may vary based on the policy buyer's unique driver profile.
State Farm offers the cheapest average rates in Texas by a sizeable margin, but that doesn’t mean it’ll necessarily be the cheapest option for everyone. At the end of the day, many factors affect your car insurance rates, which is why it’s especially important to compare personalized quotes from multiple companies before buying your next policy.
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Texas Auto Insurance FAQs
Understanding the essentials of Texas auto insurance is crucial. Here are answers to the most frequently asked questions by Texas drivers when buying a car insurance policy.
What types of car insurance are mandatory in Texas?
Texas state law requires all drivers to maintain minimum amounts of liability insurance to legally drive. These include:
$30,000 in bodily injury liability (BI) coverage per person
$60,000 in bodily injury liability per accident
$25,000 in property damage liability (PD) coverage
A policy with these limits is commonly known as 30/60/25 coverage.
Do you need full coverage in Texas?
While the state doesn’t require full coverage to legally drive, it’s worth considering, especially if you can’t afford to repair or replace your vehicle out of pocket. If you finance or lease your vehicle, your lender likely requires it anyway.
What does basic liability insurance cover in Texas?
Liability coverage comes in two parts — bodily injury (BI) liability and property damage (PD) liability. BI coverage pays for injuries you cause to other drivers and their passengers. On the other hand, PD covers any damages you cause to other people’s property, including vehicles, fences, mailboxes, guardrails, or any other type of property.
But liability insurance doesn’t cover any of your own expenses, including your medical bills or repair costs. You’ll need additional coverages for that, such as medical payments and collision insurance.
Can you own a car without insurance in Texas?
Yes. You can own a car in Texas without having liability insurance. The state doesn’t require auto dealers to verify coverage when purchasing a vehicle. But you must have a policy that meets minimum liability requirements before you can register the vehicle or legally operate it on the road.
How long do you have to insure a car in Texas?
If you already have an insurance policy, your insurer will temporarily cover a new car or replacement vehicle for about 20 days, depending on the company. It’s important to notify your insurer about the new or replacement car as soon as possible to ensure continuous coverage.
Do you need uninsured motorist coverage in Texas?
No. Uninsured motorist coverage isn’t required by law in Texas, but car insurance companies are required to offer it when you buy a policy. You can refuse coverage, but you must do so in writing.
Methodology
Data scientists at Compare.com analyzed more than 50 million real-time auto insurance quotes from more than 75 partner insurers in order to compile the rates and statistics seen in this article. Compare.com’s auto insurance data includes coverage analysis and details on drivers’ vehicles, driving records, insurance histories, and demographic information.
All the rates listed in this article have been collected from a combination of real Compare.com quotes and external insurance rate data gathered in collaboration with Quadrant Information Services. Compare.com uses these observations to provide readers with insights into how auto insurance companies determine their premiums.
Sources
- Insurify. "Insurify Projects Car Insurance Costs Will Increase Another 5% in 2025, After Soaring 42% Since 2022."
- Texas Department of Insurance. "Auto insurance guide."
- Texas Department of Motor Vehicles. "TexasSure - Insurance Verification."
- Texas Comptroller of Public Accounts. "Revenue Object 3056 – Motor Vehicle Safety Responsibility Violations."
- Texas Constitution and Statutes. "Transportation Code Chapter 601. Motor Vehicle Safety Responsibility Act."
- Texas Department of Public Safety. "Financial Responsibility Insurance Certificate (SR-22)."
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Amy BeardsleyInsurance Writer
Amy Beardsley is a seasoned insurance expert who’s been writing for Compare.com since 2023. She has more than 12 years of industry knowledge and expertise in auto, home, life, commercial, and other insurance products. Amy’s work has been published by Berkshire Hathaway Specialty Insurance, Legal & General, NerdWallet, Robinhood, Insurify, NEXT Insurance, and more.
Amy worked as a court administrator before becoming a content marketing writer. Her legal background has equipped her with the ability to simplify complex technical language into easy-to-understand content.
She graduated magna cum laude from Ferris State University, where she earned a Bachelor of Science in Business Administration and Legal Studies.
Lequita WestbrooksSenior Editor
Lequita Westbrooks is an insurance editor at Compare.com. Her writing and editing experiences span several industries, including insurance, personal finance, higher education, and more. She excels at explaining complex topics like auto insurance in simple, easy-to-understand language and is passionate about helping readers save money. Lequita graduated from the University of South Florida, where she earned her Bachelor’s degree in English.
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