After years of auto insurance rate increases, many Texans saw lower premiums in 2025. By the end of the year, the average annual cost of car insurance in the Lone Star State fell 8% from 2024, according to Insurify data.
The average cost of full-coverage car insurance in the state was $2,470 at the end of 2025, down $205 from 2024, according to Insurify’s American Driver Report (ADR).
Still, car insurance in Texas is far from the cheapest in the country. The state’s average was 15% higher than the national average in 2025. And the current average is 58% higher than the state’s average in 2021.
“The recent decline in Texas car insurance rates may be partly because vehicle theft, crash, and fatality rates have fallen in the state in recent years,” said Matt Brannon, Insurify senior economic analyst and author of the ADR. “But it’s likely that Texas is also benefiting from the trend we’re seeing nationwide. Insurers were focused on customer acquisition in 2025, and priced their policies competitively in many areas.”
What’s more, after years of rate increases, many insurers found themselves profitable again in 2025. Texas’ full-coverage average peaked at $2,708 per year in February 2025 and steadily declined through the rest of the year, Insurify data shows.
Texas’ largest cities also saw significant rate drops by the end of 2025, including Houston, the largest and most populous city in the state.
Falling accident, theft rates can drive down car insurance costs
In recent years, Texas has experienced improvement in multiple factors that affect car insurance costs.
Motor vehicle crashes in the state fell more than 3% in 2025, according to preliminary data from the Texas Department of Transportation (TDOT). The number of fatal accidents fell nearly 9% in 2025, and the number of fatalities dropped more than 10%, according to the data.
Those decreases continue a yearslong improvement in the state’s crash rates, TDOT data shows. Since 2021, the annual number of fatal crashes in Texas has fallen nearly 15% and the number of people killed in car crashes has dropped more than 16%, according to an Insurify analysis of TDOT data.
Accident totals are down overall in Texas, dropping 3% between 2024 and 2025. The longer-term decrease since 2021 was slightly smaller, at 2.75%.
Vehicle theft rates in a state also affect insurance costs there. Texas has the eighth-highest rate of vehicle theft in the nation, according to National Insurance Crime Bureau (NICB) data. In the first half of 2025, the state’s theft rate was 123.83 per 100,000 residents, the NICB reported. That’s a 25% decrease since the same time period in 2024.
What’s next? Texas may see minor increase in 2026
Despite a year of healthy declines in insurance costs, accidents, and theft rates, Texans may see minor increases in insurance costs in 2026, Insurify data scientists predict.
Nationally, Insurify projects rates will increase 0.6% this year, while Texas could experience an increase of 0.3%. That would bump the state’s average cost of full-coverage insurance from $2,477 at the end of 2025 to $2,484 by the end of 2026.
But, the ADR notes, if prolonged tariffs raise the cost of auto parts, pushing claims costs higher, insurance companies may decide to pass those expenses on to policyholders as higher rates.
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