Reviewed and approved by Samuel Corso, licensed Texas insurance agent.

Published August 2, 2026 · Updated October 1, 2026

Why is car insurance so expensive in Texas?

If your Texas car insurance bill went up at renewal, this guide walks through what the Texas Department of Insurance (TDI) publishes about auto rates and what you can check on your own policy.

The short version. Car insurance prices in Texas reflect both a driver's own risk factors and claim costs spread across all customers, according to TDI's How are your auto and homeowners insurance costs calculated?, which lists inflation, riskier driving, Texas weather events and reinsurance among the cost factors companies look at. The same page says TDI doesn't set rates or premiums and that each company's premium formula is different.

Here's what we'll cover: what TDI's statewide auto rate figures show since 2016, the cost factors TDI lists, how Texas weather connects to a car policy, why two drivers can pay different prices, who sets and reviews rates, and what you can review on your own policy.

First, what the numbers actually did

TDI publishes the statewide average rate change for personal auto insurance in Texas for each year since 2016. The figures below come from TDI's blog post Auto and home insurance rate changes, dated January 22, 2026, which gives TDI rate filing data as its source.

In TDI's figures, the largest average increase in the run is 23.8% in 2022 and the largest average decrease is 25.5% in 2023, followed by average increases of 4.8% in 2024 and 0.9% in 2025. The TDI post does not explain why any single year moved the way it did, and this guide does not guess.

These are averages of rate changes, and TDI separates a rate from a premium. The same post defines a premium as the amount you pay an insurance company for a policy, and a rate as the cost of insurance per exposure unit, which for auto is one year of coverage. TDI describes the figures as showing how much insurance companies have changed their rates on average across the state.

An average like that describes the state as a whole. Your own renewal can move by more or less than the statewide figure, or in the other direction, so the table is background for reading your bill and does not predict it.

What TDI says affects the cost

TDI says insurance companies set prices to match the cost of future claims. Its cost page, last updated September 1, 2026, covers auto and home insurance together and says companies look at your personal risk factors and also at how much they spend on all claims.

The page lists four other factors that insurance companies look at, and says factors like these affect the cost for all claims, which is spread across customers:

• Inflation. Inflation can affect the cost of new and used vehicles, car parts, and repairs, according to the page, and supply chain disruptions can affect the flow of car parts.
• Riskier driving. The page says riskier driving results in more severe and costly accidents, and that as companies pay more claims, they're more likely to raise rates to make up for those costs.
• Weather. The page lists freezes, hurricanes, hailstorms, tornadoes, wildfires and major thunderstorms among weather events in Texas, and says: "The frequency and size of these events add to claim costs."
• Reinsurance. TDI describes reinsurance as a form of insurance for insurance companies, bought to spread their risk, and says: "Higher reinsurance rates affect what insurance companies charge their customers."

Put plainly, a car insurance premium is a price set today for claims that may be paid later. When the things a claim pays for cost more, the price of a policy can rise, because TDI's page says the cost for all claims is spread across customers. That is our reading of how the pieces fit together. TDI's page does not rank the four factors or say how much each one adds.

Why Texas weather shows up on a car policy

TDI lists weather events in Texas among the cost factors insurance companies look at, on a cost page that covers auto and home insurance together, and says the frequency and size of these events add to claim costs. Separately, TDI's Auto insurance guide, last updated December 11, 2025, says coverages vary by policy and lists damage to your car because of fire, hail, theft, flood, flying gravel, or hitting an animal among the things most policies cover if you have comprehensive coverage.

The same guide says that if you still owe money on your car, your lender will require you to have collision and comprehensive coverage.

The TDI pages used in this guide do not give a figure for weather-related auto claims. Whether hail damage to your own car is covered depends on whether your policy includes comprehensive coverage and on its terms.

Why your neighbor pays a different price

Two Texas drivers can pay different car insurance premiums because companies price each driver on personal factors, and each company does that in its own way. TDI's cost page says: "Each company's premium formula is different."

That page lists these as common factors for auto insurance: your claims history; where you live and how much you drive; your age, gender, and marital status; your occupation; the cost to replace the car you drive; and your credit score.

TDI's Auto insurance guide goes into more detail on five things it says most companies consider when deciding your auto insurance premium:

• Driving record and claims history. Most companies consider this, and the guide says insurance companies will charge you more if you've had accidents or gotten tickets.
• Where you keep your car. This is another item on the guide's list for most companies. Rates are higher if you live in a city, it says, and can also vary between ZIP codes in the same city.
• The kind of car you have. For most companies this counts too. According to the guide, collision and comprehensive rates are highest for luxury, high-performance, and sports cars, and are also higher for cars that cost more to repair.
• How you use your car. Also on the list for most companies. The guide's wording is that your rates will be higher if you drive your car to and from work or use it for business.
• Your credit score. Some companies use your credit score to decide what to charge you, the guide says.

TDI's cost page also addresses changes from one renewal to the next: "If some of these factors changed since your last renewal, it could raise or lower your premium." The page adds that this includes characteristics that change over time, such as how much your auto is worth. It also says TDI doesn't have information about your policy or what caused your premium to change, and that your company should be able to tell you why it raised your premium.

Because the formulas differ, the same driver, car and ZIP code may be priced differently by different companies. A move, a different car or a change in how much you drive are the kinds of details to raise when you ask your company about a renewal.

Who sets and reviews these rates?

Insurance companies set their own car insurance rates in Texas, and TDI reviews what they file. TDI's cost page says: "TDI doesn't set insurance rates or premiums."

The same page describes the process. Insurance companies can change their rates and premium formulas by sending them to TDI in a rate filing, and can use the new rates the same day they send them or choose a later effective date. The page says companies are required to provide an analysis that supports the rate changes they file, and that TDI's actuaries review this analysis and will ask for more information if it's needed.

TDI's Auto insurance guide describes the same arrangement from the consumer side. It says TDI doesn't approve rates in advance, but that if TDI finds an insurance company's rates are too high, it can require the company to pay refunds to the people it overcharged, and that insurance companies may appeal those decisions.

TDI's blog post TDI rate reviews save Texans millions on home and auto premiums, dated April 21, 2025, gives these figures for 2024. The post is about home and auto premiums and does not break the figures out by type of insurance.

The post says of that work: "This review process saves consumers on average more than $29.2 million a year."

For a driver, this means a rate in Texas starts with the company that filed it, and TDI's part is reviewing the filing. A question about why your own premium changed goes to your company first, which is where TDI's cost page points you.

TDI has also put more of this data online. Its June 22, 2026 news release TDI prioritizes transparency by making home and auto data public describes a page for searching home and auto insurance rate filings, which lets you see if your home or auto insurance company filed a rate change with TDI.

What about the state comparisons?

This guide does not rank Texas car insurance against other states. None of the TDI pages used here compares Texas auto premiums with those in California, Florida or any other state, and we will not repeat a figure we cannot trace to a regulator.

What TDI does offer is a way to compare companies inside Texas. TDI's Shopping smart: Tips for buying auto and home insurance, last updated October 6, 2025, describes HelpInsure.com as a shopping tool for comparing rates and coverages for the companies that sell the most insurance policies in Texas. TDI's cost page suggests starting a search there to get sample estimates, then calling the companies you're interested in to get price quotes.

Sample estimates are a starting point. A quote based on your own car, drivers and address is what tells you what a given company would charge you.

What you can review on your own policy

Several parts of a Texas car insurance premium depend on choices you make, including which company you buy from, your deductibles and the coverages on the policy. The steps below are ones you can take, with TDI's wording for the facts inside each.

Shop more than one company. TDI's Shopping smart guide opens with this: "Insurance coverages and rates vary from company to company. When buying insurance, it pays to shop around."

Compare the same coverage. The same TDI guide advises comparing apples to apples and knowing what the policies you're considering cover, and adds: "A cheaper policy might provide less coverage." A quote with different limits, deductibles or coverages is a different product, so line those up before you look at the price.

Look at your deductibles. TDI's Auto insurance guide says you must pay a deductible for collision, comprehensive, and uninsured/underinsured motorist claims. TDI's Shopping smart guide says policies with higher deductibles have lower premiums, and that if you choose a higher deductible, you'll have to pay more out of pocket if you have a claim.

Ask about discounts. TDI's Auto insurance guide says each company decides what discounts to offer and the amount of the discount. It says you might be able to get a discount if you have airbags, antilock brakes, and antitheft devices in your car; have completed a defensive driving or driver education course; have more than one car on a policy; have other policies with the same insurance company; or have no claims and a good driving record. TDI's cost page suggests asking your company whether you're getting all available discounts.

Know how an older car is valued. TDI's Auto insurance guide says insurance companies will pay for repairs or replacement of your car only up to its actual cash value, which it defines as the cost to replace your car, minus depreciation. The same guide says a lender will require collision and comprehensive coverage if you still owe money on the car. Whether those coverages suit an older car you own outright is a judgment about your own finances.

What to do with this

Reviewing a Texas car insurance renewal comes down to a few steps you can take. The list is Credify's own, and the TDI facts behind each step are in the sections above.

• Ask your company what changed. TDI's cost page says your company should be able to tell you why it raised your premium.
• Confirm your details. Check that the address, mileage, vehicle and drivers on the policy are current.
• Get quotes from more than one company. TDI's cost page says each company's premium formula is different.
• Compare coverage before price. Line up the same limits, deductibles and coverages on every quote.
• Check whether you have comprehensive coverage. TDI's Auto insurance guide says coverages vary by policy and lists hail damage to your car among the things most policies cover if you have comprehensive coverage.
• Ask about discounts. TDI's Auto insurance guide says each company decides what discounts to offer.

Key facts

• TDI's Auto and home insurance rate changes (January 22, 2026) gives statewide average personal auto rate changes of 23.8% for 2022, −25.5% for 2023, 4.8% for 2024 and 0.9% for 2025, from TDI rate filing data. These are average rate changes across the state.
• TDI's How are your auto and homeowners insurance costs calculated? says insurance companies look at your personal risk factors and at how much they spend on all claims, and lists inflation, riskier driving, Texas weather events and reinsurance among the other factors companies look at.
• The same TDI page says TDI doesn't set insurance rates or premiums, and that the premium formula differs from company to company.
• TDI's Auto insurance guide says most companies consider your driving record and claims history, where you keep your car, the kind of car you have and how you use it, and that some companies use your credit score.
• The same TDI guide says coverages vary by policy and lists hail damage to your car among the things most policies cover if you have comprehensive coverage.
• TDI's April 21, 2025 blog post TDI rate reviews save Texans millions on home and auto premiums says its actuarial staff reviewed 2,343 rate filings in 2024, determined that 2,037 complied with Texas law, and had questions or asked for more information on 77% of filings. The post is about home and auto premiums and does not break the figures out by type of insurance.
• TDI's Shopping smart: Tips for buying auto and home insurance says coverages and rates vary from company to company and cautions that a cheaper policy might provide less coverage.

Sources: Texas Department of Insurance, Auto and home insurance rate changes, How are your auto and homeowners insurance costs calculated?, TDI rate reviews save Texans millions on home and auto premiums, TDI prioritizes transparency by making home and auto data public, Auto insurance guide, and Shopping smart: Tips for buying auto and home insurance. This page is general information, not legal or financial advice; coverage is subject to the terms of your own policy.

Take the next step

Before you compare car insurance in Texas, have your current policy in front of you so every quote can be set against the same limits, deductibles and coverages.

For the comparison itself, how to compare auto insurance in Texas is the companion to this page, and what car insurance is required in Texas is a separate guide on that question. If it's the household side that changed, adding a teen driver to your car insurance in Texas covers a new driver joining the policy, and why did my home insurance go up in Texas works through the home version of this question.

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