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Low-income car insurance in Texas
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Texas drivers face relatively high insurance costs, with average premiums of $2,019 per year for full coverage and $565 per year for minimum. With 14 percent of Texans living below the poverty line, this can create a challenge for drivers needing coverage to meet state requirements while managing excessively tight budgets. While no state-backed low-income car insurance programs exist in Texas, Bankrate’s guide explains options to find affordable coverage that meets your needs.
Low-income car insurance in Texas
Standard car insurance may be unaffordable for low-income individuals. To increase access, many states offer low-income plans that provide some level of coverage at lower rates to qualifying drivers. Unfortunately, Texas does not offer any state-sponsored car insurance programs. The only states that currently offer these programs are California, Hawaii and New Jersey. However, there are multiple ways that low-income families in Texas could purchase a policy that is more affordable than average:
- Shop around for car insurance and get quotes from multiple providers to help you find the cheapest policy available for the type and amount of coverage you need.
- Take steps to improve your credit record to help achieve a lower rate over time. Insurers view policyholders with favorable credit history as less risky to insure, often resulting in cheaper premiums.
- Consider opting for a higher deductible to earn a lower rate. Keep in mind that this means you’ll be taking on more financial responsibility out of pocket in the event of a claim, so it should be an amount you can afford.
- Look for insurance companies that offer multiple discounts you can take advantage of.
Car insurance for low-income drivers and families
Texas lacks low-income car insurance programs. However, many insurers provide affordable coverage. The table below shows the 10 cheapest companies for full coverage based on average rates from Quadrant Information Services for a 40-year-old driver with a clean record and good credit. Your quote may vary based on your personal factors, but these companies can be a good place to start your search.
|Company||Average annual full coverage premium||Average monthly full coverage premium|
Low-income car insurance for Texas drivers with a poor credit score
Texas permits insurance companies to use a driver’s credit-based insurance score as a rating factor when determining their premium. If you have poor credit, you’ll likely pay more for your car insurance than someone with a positive credit history.
Based on our research, the following companies offer the cheapest full coverage insurance for Texas drivers with poor credit:
- Mercury: $2,182
- Nationwide: $2,434
- Esurance: $2,577
Low-income car insurance for Texas drivers with an at-fault accident
Having one or more at-fault accidents on your motor vehicle record could significantly increase the rate you pay for car insurance due to you being at a higher risk for future claims. If your driving record isn’t perfect, the companies below may be a good option for you. State Farm, Nationwide and Geico offer the cheapest full coverage in Texas for drivers with an at-fault accident on their record based on our analysis:
- State Farm: $1,724
- Nationwide: $2,038
- Geico: $2,081
Low-income car insurance for Texas families with a teen driver
For many teens, getting a driver’s license is an exciting milestone. However, this milestone can cause substantial financial hardship for parents or guardians in the form of increased car insurance premiums. Due to the added risk of insuring a young driver, policyholders who add a teen driver to their policy will usually see a steep uptick in their rate.
The premiums below illustrate the average cost of coverage when a 16-year-old driver is added to their married parents’ policy. If you have a newly-licensed driver in your home, these companies might offer the cheapest full coverage option for you:
- Nationwide: $2,251
- State Farm: $2,727
- Geico: $3,225
Low-income car insurance for Texas senior drivers
Seniors can begin to experience an increase in their premiums the older they get, especially as the risk of at-fault accidents typically increases for older age groups. However, with one in three seniors in America living in poverty, even a small raise in rates can have a big impact on monthly expenses.
The following averages are based on 70-year-old drivers with a clean driving record. If you are an older driver on a budget, you might want to start with the companies below to find the cheapest full coverage:
- State Farm: $1,308
- Geico: $1,319
- Esurance: $1,667
Texas minimum car insurance requirements
In Texas, drivers are required to carry at least 30/60/25 personal liability insurance, which is considered to be a minimum coverage policy. Minimum coverage in Texas includes the following:
- $30,000 in bodily injury liability coverage per person
- $60,000 in bodily injury liability coverage per accident
- $25,000 in property damage liability coverage per accident
Additionally, uninsured and underinsured motorist coverage and personal injury protection (PIP) must be offered, but can be rejected in writing.
For low-income drivers in Texas, a minimum coverage insurance policy might seem like a cost-effective choice. However, these policies often fall short in accidents involving another vehicle or passenger. If accident damages exceed your policy's limits, you'll need to cover the extra costs. Additionally, minimum coverage policies don't cover your vehicle; this is where collision and comprehensive coverage are beneficial — also known as full coverage. While full coverage might have a higher upfront cost, the more robust financial protection it offers could save Texas drivers more in the long run after a claim. Nonetheless, if you can only afford minimum coverage, it's wise to shop around to find the fit for your needs.
While every car insurance company in Texas charges a different rate, we found that the 10 providers in the table below to offer the cheapest car insurance in Texas for minimum coverage on average:
|Company||Average annual minimum coverage premium||Average monthly minimum coverage premium|
Based on the rates above, Geico offers the cheapest car insurance in Texas at $420 per year for minimum coverage. Although Geico’s coverage is somewhat limited, the company offers a long list of discounts with savings for military personnel, federal employees, good students and many other groups.
State Farm and Esurance are the next cheapest options at $455 and $478 annually for minimum coverage.
Car insurance discounts for low-income drivers
To get insurance for low-income families in Texas, look into providers that offer a variety of discounts you can qualify for. Even if you receive a quote that is out of your budget, you may be able to lower your premium significantly by applying discounts. Here are some of the most common auto insurance savings opportunities:
Most car insurance companies offer policy bundling discounts that can help you save on your auto insurance premium. Typically, bundling discounts apply if you have your auto and your homeowners or renters policy with the same company. However, each company sets its own guidelines. You may want to ask your agent for specifics.
Along with bundling discounts, many insurance companies will offer a multi-car discount for insuring more than one vehicle on your policy.
If you practice safe driving habits, you can usually qualify for a discount on your insurance premium. Look for companies that offer a discount for being claims-free or completing an approved defensive driving course. Many popular insurance carriers also offer an app-based safe driver rewards program, which tracks your driving using telematics. With these programs, drivers generally save more money on their premium over time as they continue safe driving habits.
Vehicle safety features
Cars equipped with advanced safety features might qualify for discounts. Features like anti-theft systems, anti-lock brakes or lane departure alerts are seen as risk reducers. It's worth checking with potential insurers to see which features might qualify you for savings.
Maintaining a longstanding relationship with the same insurer can sometimes bring savings. Sticking with the same company for several years not only signifies trust, but can also earn you loyalty discounts and may even gradually increase savings amounts the longer you remain with the provider.
Although the number of discounts available will vary from company to company, most providers offer at least a few different ones that can be utilized to reduce your premium further. When researching a car insurance company, you can often check its auto policy page or discounts page for its savings opportunities. Following up with a licensed agent can help you determine which ones are most applicable to your situation.
Frequently asked questions
Bankrate utilizes Quadrant Information Services to analyze 2023 rates for ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:
- $100,000 bodily injury liability per person
- $300,000 bodily injury liability per accident
- $50,000 property damage liability per accident
- $100,000 uninsured motorist bodily injury per person
- $300,000 uninsured motorist bodily injury per accident
- $500 collision deductible
- $500 comprehensive deductible
To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2021 Toyota Camry, commute five days a week and drive 12,000 miles annually.
These are sample rates and should only be used for comparative purposes.
Incidents: Rates were calculated by evaluating our base profile with a single at-fault accident applied.
Age: Rates were calculated by evaluating our base profile with the age 70 (base: 40 years) applied.
Teens: Rates were determined by adding a 16-year-old teen to a 40-year-old married parents’ policy. The rates displayed reflect the total cost of a driver this age added to their parents’ policy.
Credit-based insurance scores: Rates were calculated based on the following insurance credit tiers assigned to our drivers: poor. Insurance credit tiers factor in your official credit scores but are not dependent on that variable alone.