Auto Insurance in Texas (TX)

If You Are Paying More Than $1,257.91 on Auto Insurance in Texas, You Are Paying Too Much.

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Auto Insurance Industry in Texas

  • An average consumer pays $1,571.00 on auto insurance
  • 270 of every 100,000 vehicles are reported stolen every year
  • Accident fatality rate of 1.33%
  • Of all accidents: 54% are road-way accidents, 18% are intersection accidents, and 13% of all accidents involve at least 1 truck.

Everything is big in Texas and now that includes the speed limit on a Central Texas toll road between the cities of Austin and San Antonio. Drivers can soar to 85 mph uninhibited but are still required to show financial responsibility for this privilege. Throughout the state, drivers must carry some form of auto liability coverage.

Texas’ Minimum Requirements on Auto Insurance

In an attempt to decrease the number of uninsured drivers in the state, Texas law makes carrying a minimum auto liability insurance coverage as a mandatory requirement. As a resident of the state, you have several options to meet this requirement and avoid penalties. The following are acceptable ways to establish financial responsibility:

  • Deposit $55,000 with the county comptroller in securities or cash
  • Deposit $55,000 with the county judge in a cashier’s check or cash
  • Purchase auto liability insurance from a company authorized to sell insurance in Texas

Typically, most drivers purchase auto liability insurance according to Texas’s coverage requirements of a 30/60/25 policy. This type of policy provides coverage based on the following:

  • $30,000 when one person is injured in an accident
  • $60,000 to cover injuries to everyone involved in an accident
  • $25,000 to cover property damage after an accident
If you purchase auto liability insurance, you must keep an insurance ID card in your vehicle. You will need to show the ID to a law enforcement official if you are involved in an accident or pulled over for traffic violations. Proof of auto liability insurance is also required when you need to register a vehicle or apply for a Texas driver’s license.

Additionally, the state of Texas uses TexasSure, which is an insurance tracking database to verify insurance coverage. This program is used by state insurance agencies to submit current insurance coverage information to the Texas Department of Motor Vehicles (TxDMV). Both law enforcement and state agencies have access to the database.

If your auto insurance cancels or lapses, you will receive notification from TxDMV to send proof of insurance to the agency. Failing to respond or maintain auto liability insurance will result in penalties.

You face having your driver’s license and vehicle registration suspended. After suspension, you will have 20 days to appeal the decision. Appealing the suspension puts the procedure on hold until you can resolve any discrepancies. Generally, you can have the suspension removed by providing proof of insurance coverage and paying a reinstatement fee ranging from $175 to $350.

A second suspension can lead to having your vehicle impounded for 180 days and a $15 impoundment fee per day.

Consumer Car Licensing Information in Texas

Texas residents may apply for one of three different types of private passenger driver’s licenses. Class A and Class B are issued for residents who driver noncommercial vehicles such as motor homes that weigh more than 26,000 lbs. The most common, Class C, is issued for private passenger vehicles.

The application process includes passing a written test, vision screening and driving test. Generally, the process varies based on the experience level of the driver. If you are a first-time adult driver or teenager, you will need to pass all three tests. However, as a new resident of Texas with a current out-of-state license, you are not required to take the written and driving tests.

Examinations are administered at local DMV offices where residents also submit their applications. You can take the written test and vision screening on a walk-in basis. Appointments are required for the driving test.

If you are a first-time driver, you will need to provide the following:

  • Proof of legal identity
  • Valid social security number
  • Driver’s license application
  • Photograph and thumbprint

As a new resident, you have 90 days to pass the vision screening and receive a Texas driver’s license. If you hold a valid out-of-state license, you can exchange it for a Texas driver's license.

The fee for a Class A, B or C driver’s license is $25 and valid for six years.

Motorcycle Licensing Information in Texas

You can receive a Class M license or endorsement to operate a motorcycle on Texas roads. If you are an inexperienced driver, you may apply for a motorcycle instruction permit. Applications for a permit are available at a local driver’s license office.

If you are an experienced motorcycle driver, you must pass three tests including written knowledge, vision and on-cycle. The written test covers road signs, motorcycle information and riding rules of the road. On-cycle driving covers operation of a motorcycle in actual driving conditions.

An application for either a motorcycle license or adding an endorsement to a regular driver’s license is required along with the following documentation:

  • Proof of U.S. citizenship
  • Proof of legal identity
  • Valid social security number

It costs $25 for a Texas motorcycle license and $15 to add an endorsement to an existing license.

The state of Texas enforces a helmet law for all motorcycle drivers. Typically, you are exempt from wearing a helmet if you are 21 years old and have completed a motorcycle safety course. An exemption may also apply of you have health insurance.

Commercial Vehicle Licensing Information in Texas

Texas issues a Class A, B and C commercial driver's license (CDL) to residents who want to driver commercial vehicles. Requirements in the state include having a clean driving record and receiving proper training. CDLs are available through the Texas Department of Public Safety (DPS). The process includes:

1. Providing proof of your legal identity, including a social security number
2. Completing a CDL application and endorsement forms
3. Pay all required fees for a five-year CDL, which starts at $61 plus $10 for each endorsement.
4. Pass written knowledge tests and the vision screening
5. Pass the on-road driving test in the vehicle class for which you are applying
6. Be fingerprinted and photographed
7. Meet medical certification requirements

More Resources on Auto Insurance in Texas

Department of Insurance