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A poor credit score can lead to 76% higher car insurance rates in Texas

<h5>Written by <a href="https://rateretriever.com/about/katie-dee/"><span style="text-decoration: underline;">Katie Dee</span></a></h5>
Written by Katie Dee
Written by Katie Dee
<h5>Edited by <a href="https://rateretriever.com/about/alyssa-dicrasto/"><span style="text-decoration: underline;">Alyssa DiCrasto</span></a></h5>
Edited by Alyssa DiCrasto
Edited by Alyssa DiCrasto
Published on 2024-01-09

Read time: 3 min

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Even within the same state, car insurance rates look different for each individual driver. Rates are determined by factors such as your driving record, your age, the make and model of your car, and more. In Texas, the average yearly cost for car insurance is $1,886, just 3.4% higher than the national average of $1,824. However, some drivers in this state still pay upwards of $3,300 every year for car insurance.

So, how can you be sure you’re getting the best rate possible? First you need to understand what exactly goes into nailing down your specific premium.

Gender and Texas car insurance rates

In the state of Texas, car insurance companies use the gender specified on your license as a rating factor in car insurance. According to Rate Retriever’s Auto Insurance Rates Quarterly Update, on average, female policyholders pay around 3% less for car insurance than their male counterparts, a difference of about $50 per year.

While the use of gender as a rating factor has been prohibited in other states, Texas’s board of insurance still allows the practice, and research shows that female drivers are more risk averse on the road and, therefore, less likely to get into an accident.

Coverage level

The level of car insurance coverage you choose will also have an impact on your rate. Rate Retriever’s research showed that those with a minimum coverage policy can save up to 63% on their car insurance when compared to those with premium coverage. The average annual premium for a minimum coverage policy in Texas is $707 while premium coverage costs around $1,886.

Furthermore, drivers who choose to have a standard coverage policy with slightly lower limits pay an average of 4% less than those with premium coverage. The average premium for standard car insurance coverage in Texas is $1,807 per year.

Credit score

According to Rate Retriever’s report, credit score affects car insurance rates in Texas more than any other rating factor. On average, drivers in the state with poor credit scores pay $3,316 per year for their car insurance. This is an increase of 76% when compared to those with good credit scores who pay $1,886 annually.

Auto insurance companies often look at a policyholder’s credit score to determine how much risk the policy will introduce because research has shown a relationship between a person’s credit score and their likelihood of filing an insurance claim. Because of this, monitoring your credit score is essential when it comes to ensuring you’re not overpaying for car insurance.

How zip code impacts car insurance in Texas

Your exact location within the state of Texas will have a fairly large impact on what you will pay for car insurance. Insurers typically consider factors specific to your zip code such as traffic patterns, crime rates, and car accident rates in order to determine how much risk is associated with a certain policy and then set rates accordingly.

Currently, the most expensive zip code for car insurance in Texas is 75224, located in Dallas, with an average annual premium of $2,399. With an overall population of 1.288 million people and a population density of around 3,400 people per square mile, Dallas is the third most populous city in Texas. In a large metropolitan area like this, car accidents will happen more frequently and so car insurance companies will assign higher rates.

Conversely, the least expensive zip code for Texas car insurance is 76543 in Killeen, with an average annual premium of $1,498. This area has a population of just over 156,000 people, significantly reducing the likelihood of the driver filing a claim and allowing car insurance companies to assign lower rates.

How to lower car insurance rates in Texas

There are several ways you can control your car insurance rates in Texas. The first is to shop around and compare rates from multiple different insurance companies in your area to ensure that you are getting the best one. Rate Retriever’s short quiz can help you get started and find savings in 30 seconds.

Additionally improving your credit score, maintaining a good driving record, and seeking out discounts you could be eligible for are great ways to save money on car insurance in Texas.

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