Low-income car insurance in Texas

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, there are no state-sponsored programs for low-income car insurance in Texas. 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.
• Ensure that you are receiving all the discounts for which you qualify. Most insurers offer at least a small handful of discount opportunities, many of them easy to earn. You may, for example, save money on your policy if you agree to receive all documents electronically rather than by postal mail.
• Review your coverage annually to be sure your policy only includes the coverage you need. If low-income car insurance in Texas is your highest priority, for example, and you own an older car, you may not want to pay for collision coverage since the car might not be worth fixing after a serious accident.

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.

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:

• Geico: $3,212
• Nationwide: $3,329
• Mercury: $3,470

Low-income car insurance for Texas drivers with an at-fault accident

Insurers tend to charge more for your policy if you have had an at-fault accident. Since this may mean that you have engaged in risky driving behaviors in the past, insurers could place you in a higher risk pool for future accidents as well. So, if your driving record isn’t perfect, the companies below may be a good option for you to get the cheapest full coverage policy possible for your circumstances:

• State Farm: $2,253
• Geico: $2,282
• USAA: $3,029

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 expensive 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 policies:

• State Farm: $3,561
• Nationwide: $3,374
• Geico: $3,665

Low-income car insurance for Texas senior drivers

Seniors can begin to experience an increase in their premiums the older they get. This is primarily attributed to increased at-fault accidents among seniors, generally caused by deteriorating vision or slower reaction times. 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:

• Geico: $1,688
• State Farm: $1,765
• USAA: $1,984

Texas minimum car insurance requirements

In order to legally drive a vehicle on public roads, you must meet Texas’ minimum insurance requirements as listed below:

• $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.

While the cost of minimum coverage is tempting in the short term, it could end up costing you thousands down the road. If accident damage exceeds your policy's limits, you'll need to cover the extra costs out of pocket. With inflation driving up repair costs and medical expenses, these limits are often met fairly quickly.

In addition, a minimum coverage insurance policy only protects the other drivers and their property if you were at fault in an accident. You may want to consider adding collision and comprehensive coverage — otherwise known as full coverage — to your policy if you want to protect your own assets. Full coverage usually costs you more upfront, but it helps ensure an accident doesn’t send you into debt.

All that said, sometimes minimum coverage is all your budget can handle. While every car insurance company in Texas charges a different rate, we found that the 10 providers in the table below offer the cheapest car insurance for minimum coverage on average:

Based on the rates above, Geico offers the cheapest car insurance in Texas at $458 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.

Next cheapest is State Farm at $501 for an average minimum coverage policy, with USAA and Mercury also offering low average rates.

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 discounts you could use to qualify for a Texas low-cost insurance payment:

Policy bundling

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.

Driving habits

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 premiums over time as they continue safe driving habits.

Vehicle safety and security features

Cars that are equipped with advanced safety features generally qualify for cheaper insurance rates. Elements like anti-lock brakes and lane departure alerts help prevent accidents, while comprehensive air-bag systems help mitigate the severity of potential injuries if a collision does occur. Insurers like these features because they either reduce the cost of filing your insurance claim or prevent one altogether. As a result, they typically reward your investment in safety with a discount.

In the same light, insurers also generally offer discounts for cars with anti-theft systems that help prevent claims. You may also qualify for more savings if you describe to your provider where you routinely park your vehicle. Because as obvious as this might sound, cars parked on the street are much more likely to be damaged or stolen than cars parked in a garage.

Loyalty benefits

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

These are sample rates and should only be used for comparative purposes.