Cheapest Texas Car Insurance for Low-Income Drivers
Find Cheap Auto Insurance Quotes in Texas
Car insurance is required in Texas. If you're a low-income driver, you may be inclined to save money by purchasing the bare-minimum car insurance, but we've found that rates can vary greatly from one insurance company to the next, even for a minimum policy. In fact, the difference between the most expensive and the most affordable average car insurance in Texas is more than $1,400 a year.
Below, you'll find our analysis on the cheapest insurance coverage for low-income drivers and their families in the Lone Star State.
Cheapest companies for low-income car insurance in Texas
On average, the cheapest car insurance company in Texas is USAA, with policies averaging as low as $34 a month for our sample drivers. But USAA is only available to current and former military members and their families.
Fred Loya Insurance is the cheapest company with no eligibility requirements, with liability-only policies that cost an average of $45 per month.
Find Cheap Auto Insurance Quotes in Texas
The average cost of Texas car insurance is $48 per month for a policy that meets Texas minimum insurance requirements. You'll pay $136 per month for full coverage car insurance in Texas.
Average monthly cost of car insurance for drivers making $24,000 per year
For low-income drivers, buying Texas-required car insurance could put a dent in your budget. For example, suppose you earn an income of $24,000 per year — or $2,000 per month — after taxes.
With Fred Loya or USAA, you'd spend 2% of your income on car insurance. With Allstate or MetLife, you'd spend 6% to 8% of your income on car insurance.
Company | Rate | Percent of income | |
|---|---|---|---|
| Fred Loya | $45 | 2% |
| State Farm | $51 | 3% |
| Chubb | $63 | 3% |
| Geico | $78 | 4% |
| Dairyland | $80 | 4% |
*The sample budget is for a driver who earns $2,000 per month after taxes.
Best car insurance company for low-income drivers in Texas
Low-income drivers in Texas may not have a lot of options when it comes to affordability. But the most affordable insurance companies are not always the best. If you're willing or able to pay a bigger share of your budget for a better service experience you might want to consider choosing an insurer with a strong customer service reputation.
For example, Chubb is affordable in Texas: It costs an average of $63 per month, which is just $18 more than Fred Loya Insurance. But based on customer complaints, Chubb has a great service reputation and is a much better choice than Fred Loya. In fact, Fred Loya has the highest rate of customer complaints among our sample insurers.
Low-income drivers who value customer service and can afford to spend around $20 more per month on car insurance should consider these trade-offs.
Best Texas car insurance companies for low-income drivers
Rank | Company | Market share | Complaint Index |
|---|---|---|---|
| 1 | Farmers Insurance | 6.7% | 0.16 |
| 2 | Chubb | 0.4% | 0.27 |
| 3 | Travelers (Consumers County Mutual) | 1.9% | 0.34 |
| 4 | Nationwide | 1.5% | 0.39 |
| 5 | Progressive | 13.9% | 0.4 |
Companies are ranked by the rate of customer complaints, measured by the Complaint Index calculated by the National Association of Insurance Commissioners. A low Complaint Index means a company is more likely to have good customer service.
Minimum car insurance coverage requirements in Texas
Texas has the same minimum car insurance coverage requirements for every driver. Texans must carry coverage with the following limits, at minimum:
- Bodily injury (BI) liability insurance: $30,000 per person/$60,000 per accident
- Property damage (PD) liability insurance: $25,000 per accident
If you're a low-income driver and are simply looking for savings, a policy with minimum state requirements will be the cheapest you can buy. But you should note that liability insurance with these limits may not offer enough protection in the event of a major accident.
Liability insurance won't cover damage to your car; you'll need comprehensive and collision insurance for that. And while gap insurance is not required by law, it can be a good investment, too. Especially if you just bought a new car, or if your vehicle is underwater — meaning it's worth less than the balance you owe on your car loan.
Methodology
Rates were drawn for nine companies in thousands of Texas cities. Our sample driver was a 30-year-old man driving a 2015 Honda Civic EX. Unless noted otherwise, rates were for this driver, who had a below-average credit record and was quoted for a minimum-coverage policy.
Editorial Note: The content of this article is based on the author's opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.