How Auto Insurance Quotes are calculated in Texas

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If you have ever received multiple auto insurance quotes in Texas, then you must have noticed that for a similar policy, different insurance providers charge varying amounts for different drivers. Why is that? Below we discuss how auto insurance companies determine quotes, and what factors affect them.

Motorists in Texas need minimum auto liability insurance coverage to operate their vehicles on the road. With the basic 30/60/25 coverage, the vehicle owners “prove” their financial responsibility.

The average yearly premium drivers in Texas have to pay has been estimated at $1,560.89. But this amount varies by policy holder, as they struggle to understand how and what affects their premium rates.

Because of certain factors there is a wide variation around the average premium amount. We are listing these factors below, but keep in mind that not every company considers all of these factors. There are other factors (not mentioned here) that can alter the quotes offered by insurance companies.

Some factors affecting your premium may be:

  • Your Driving Record in Texas Impacts Insurance Rates
    Insurance companies see erroneous drivers as a huge risk, or “high risk drivers”. If you have a driving record splattered with tickets, violations or at-fault accidents, you would be categorized as a high risk driver and your premiums will go up. Driving responsibly and having a clean record lowers your premium. Insurance quotes given by insurers can also increase if you are a new driver and have not been insured for some time.
  • Your Mileage Matters with Auto Insurance Quotes
    Insurance companies prefer drivers who drive low miles because they have less chances of being in an accident. If you commute a long distance to work, your premiums will be higher. If you take your vehicle out less frequently (the term insurers use in this case is “pleasure use”), then your quotes will come down.
  • Your Address
    Do you live in a crime prone area where your car is likely to be stolen? Then be ready to pay higher car insurance premiums. This is because, in the calculation of a quote, where you live and where the car is parked, really matters. If your area records higher rates of vandalism, theft and accidents, then you have to pay higher auto insurance prices as compared to drivers living in safer neighborhoods.
  • Your Age
    The insurance companies in Texas consider young, first time teenage drivers as “high risk”. This is because statistics prove that driving gets better with experience, and mature drivers have fewer accidents. If you are a teenager, or are below age 25 drive – your car insurance premiums will be higher. For those over 55, you will see your insurance premiums get lowered gradually.
  • Your Gender
    Insurance companies in Texas believe that women are safer drivers. And statistics have proven that women tend to get into fewer accidents. The number of women DUI offenders is also very low compared to male drivers. That is why women drivers are considered as ‘low risk’ by insurers. If you are a female motorist in Texas, your premium will be lower than that of a male driver with a similar driving record.
  • Your Car
    If you drive a luxury car that costs more to repair- your premium will be higher as it is more likely to catch the eye of car thieves. A car’s risk value is estimated by insurance companies based on factors like engine horse power and driver safety features. A sports car is more expensive to insure than a base model sedan, because of the vehicle repair costs and statistics about which gets into more accidents.
  • Your Credit
    Insurance companies love statistics, and statistics show that people with poor credit ratings get in more accidents and receive more traffic violations. If you fit into the poor credit rating category, you will likely pay more for the same insurance policy as someone with good credit.
  • Your Education
    Again, statistics are loved by auto insurance companies. Statistics show that people with a higher education are better drivers… and are less financial risk. Therefore people with more education pay lower insurance premiums.

So many different variables affect the rates you will be charged by insurance companies in Texas. Each factor may be minor, but they add up to big expenses when all lumped together. Auto insurance quotes from different companies are determined using these factors and others. We hope this information will make you understand your policy and premiums better.

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