Car Insurance Companies for Texans

Can I really save 20% on my car insurance in 20 minutes?

It’s impossible not to notice the ads car insurance companies put on the radio, TV, and the Internet targeted at those living in Texas. It seems that car insurance companies saturate Texans with more advertising than beer companies. However, studies show that the average Texas resident will not save money by switching car insurance companies. Unfortunately, that radio ad you heard driving through San Antonio or that TV ad you saw on the Austin local news were exaggerating the benefits of switching car insurance companies. However, there are times when you have to switch insurers. Perhaps your car insurance company raised your rates for no apparent reason or gave you poor customer service. No matter what happened, do your research to ensure you make the right choice.

What you need to know

The cost of car insurance is on the rise

The cost of purchasing a policy from one of the car insurance companies is increasing. In the last two years, the cost of a policy has increased four percent. This may not sound like a lot, but this is twice the rate of inflation. It’s also important to note that the average household income in Texas was stagnant. This means the average Texan has to pay a greater percentage of their income towards car insurance. However, will help you find an auto insurance quote that doesn’t break the bank.

Credit-based insurance scores

In recent years, car insurance companies have begun using credit scores to calculate premiums. The average Texan has a score of 667, slightly below the national average of 687. This means that the advent of credit-based insurance scores is a negative thing for Texans. Consumer advocacy organizations are lobbying to end the practice, as a driver’s credit score does not equate to his risk of having an accident. They have been unsuccessful.

Uninsured motorists

Texas is a state with a large population and a large amount of income inequality. Many well-off people live in Texas, but just as many Texans struggle with poverty. Unfortunately, this means many drivers in Texas don’t purchase car insurance. This causes the car insurance companies to raise premiums for everyone, as they would likely have to foot the entire bill in an accident involving an uninsured driver.

Cheap repair work

Recently, some car insurance companies have begun requiring drivers to get their cars fixed at certain repair shops. These body shops often use low-quality aftermarket parts and do shoddy work. Most of the large and established car insurance companies won’t do this. However, some of the smaller companies will.

How to actually save money

Compare rates annually

Use to compare rates every year, if not more often. Events in your life can decrease the cost of your car insurance. The most common events that cause a decrease in car insurance costs are aging and getting married. Your current car insurance company may not account for these events. If you switch companies and get a new policy, your new company will take these events into consideration and lower your premium.

Pick a top-rated insurer

If you pick a top-rated insurer, you’ll end up paying less if you have to file a claim. The best insurers do not try to skimp out when you get into an accident. Car insurance companies that consistently get high marks include USAA, Amica, and NJM. Check to see if you can get a quote from these car insurance companies.

Set your deductible correctly

It is important to consider both the cost of your insurance and the risk of an accident when setting your deductible. If your car insurance company offers you a good rate on your insurance, you should set the deductible fairly low. This way, you do not have to pay much out of pocket if you get into a crash. If you cannot get a car insurance company to offer you a cheap rate, you may want to go with a higher deductible to save money. Keep in mind that a higher deductible means more out of pocket expense if you get into an accident. This is probably the best course of action if you live in rural Texas and do not have to deal with a lot of traffic, because you are at a low risk of getting into an accident.

Think through all of your coverage

Carefully check all of your coverage amounts and ask yourself if they are too high or too low. It’s especially important to check your liability and medical coverage. It’s tempting to reduce the amounts to the state minimum, but keep in mind the high costs of legal action and medical bills in Texas. You’ll actually save money by raising the limits of your health and legal coverage if you get sued or badly hurt.

Be vigilant during the repair process

As previously mentioned, some car insurance companies will try to save money by using a body shop that does low-quality work and uses low-quality parts. Watch carefully to ensure this doesn’t happen. Compare reviews of several different body shops before you choose one. Ask the employees if they will use Original Equipment Manufacturer, or OEM, parts instead of aftermarket parts. Aftermarket parts are low-quality, but some car insurance companies cut corners.

Take advantage of discounts

The average yearly auto insurance premium in Texas is roughly $1600, which is a lot of money for most Texans. Premiums can be substantially reduced through thorough use of discounts. Car insurance companies offer discounts for many different criteria, and the types and amounts of discounts vary from company to company. Car insurance companies often give discounts for taking driving courses, installing an anti-theft system in your vehicle, and for being a member of certain groups. Discounts are also offered for those that have multiple insurance policies through the same company.

Keep your credit score high

Keeping your credit score high has multiple benefits. You’ll get lower interest rates and have an easier time getting a mortgage. You’ll also get lower insurance premiums. Conversely, you may see an increase in your premiums if your credit score takes a nosedive. There are many reasons to maintain excellent credit, and a lower premium from car insurance companies is certainly one of them.

Tell your car insurance company if you are driving fewer miles. Visit for more information about cheap car insurance.

Your premium depends in part on how many miles per year you drive. If you drive quite a few miles a year, car insurance companies will set a higher premium. If you drive very few miles a year, car insurance companies will charge you a lower premium. Let car insurance companies know if you are driving less due to recent life changes. For example, if you have recently become self-employed and no longer commute, you’ll inevitably be driving much less. Car insurance companies may take this into consideration and lower your premium. The premiums on the next policy you purchase from many car insurance company will be lower, as you will let them know when applying for the policy that you do not commute.

Bad Credit Raises Auto Insurance Premiums in Texas

Your credit score is possibly the most important asset you have. It affects your ability to get a new job and a new home, and it can even impact the amount you pay for car insurance in Texas. And in order to get the most value out of your dollar, it can be well worth the effort trying to find cheap auto insurance in Florida here.
The Dallas Morning News recently released a rate analysis and the results were startling. People who have bad credit pay an average of 39 percent more for auto insurance in Texas. Those who use State Farm have to pay even more for their credit mistakes. The major insurer charges Texans with bad credit an average of 51 percent more for auto insurance premiums.
The question is why do people with bad credit have to pay so much more in the state of Texas?
What Bad Credit Says About You
At one time, auto insurance companies determined rates based on the person’s age, gender, and driving record, but that changed approximately two decades ago. At that time, the Fair Isaac Corporation (FICO) determined that people with low credit scores have a higher risk of filing insurance claims. That is a correlation, not causation, but it still provides insurance companies in Texas with the justification they need to hike up cheap car insurance quotes Texas offers.
This justification is so great that many insurance companies give it more weight than an accident on a record. That means if you have a clean driving record but bad credit, you will likely pay more than someone who has pristine credit and an accident on his record.
Getting the Best Deal
The state of Texas does have consumer protections in place to prevent companies from using credit scores unfairly. While an auto insurance company is well within its rights to make you pay more if you have defaulted on loans, you are protected if your score went underwater due to medical bills. If you feel that an auto insurance company is using your rates unfairly, contact the insurance company. If that does not work, file a complaint with the Consumer Financial Protection Bureau.
In addition, shop around if you have bad credit. Some auto insurance companies put more emphasis on bad credit than others, so you might still be able to find a deal, even if your credit is less than stellar.
Finally, work on repairing your credit before purchasing auto insurance. Put your debts in order, with the lowest one first. Pay it off, and then go up to the next one. This is a quick and easy way to reduce your credit burden. The less you owe, the better your credit score will be so you will pay less for car insurance in Texas. As an added bonus, you will also get a better rate on your next auto loan when you have good credit.
With so many factors that go into scoring auto insurance in Texas, it can feel like an uphill battle to get a good rate. The good news is you do have some control. Work on improving your credit scores before shopping for rates. Then, you will have some manageable rates to choose from when purchasing auto insurance in Texas.