Is the Texas Automobile Insurance Plan (TAIPA) Cheap?
Last Updated on May 19, 2021
The Texas Automobile Insurance Plan Association (TAIPA) allows high-risk drivers to maintain minimum car insurance coverage.
But is TAIPA cheap? Will you pay low car insurance premiums with the Texas Automobile Insurance Plan? Or is TAIPA expensive?
Keep reading to find out everything you need to know about TAIPA, how it works, and how much it costs.
Table of Contents:
- What Is the Texas Automobile Insurance Plan Association?
- TAIPA Eligibility Requirements
- Is TAIPA Car Insurance Cheap?
- How Does TAIPA Car Insurance Work?
- TAIPA Payment Options
- How to Get the Cheapest Possible TAIPA Car Insurance
What Is the Texas Automobile Insurance Plan Association (TAIPA)?
The Texas Automobile Insurance Plan Association (TAIPA) is a government-run insurance system for high-risk drivers. Thanks to TAIPA, high-risk drivers can get state minimum insurance coverage.
Under the Texas Motor Vehicle Safety Responsibility Act, all drivers in Texas must meet certain minimum liability insurance limits to legally drive. This liability insurance protects other drivers on the road from any damages you inflict.
If you are a high-risk driver, then you may not be able to afford car insurance from conventional car insurance providers. Your application for car insurance may be denied. Or, the insurer may try to charge ridiculously expensive premiums.
Thanks to TAIPA, any high-risk driver can access bodily injury and property damage liability insurance at a more reasonable price than what’s available from the open market.
TAIPA Eligibility Requirements
TAIPA car insurance isn’t available to everyone. It’s only available to drivers who have been rejected by at least two insurance companies in the last 60 days.
Specific TAIPA eligibility requirements include:
- A valid driver’s license
- A resident of Texas or have a vehicle registered in Texas
- Rejected by at least two insurance companies within the last 60 days
If you have been rejected by at least two insurance companies in the last 60 days, then you can submit a TAIPA application through an insurance agent.
After the insurance agent submits your application, you will enter the assigned risk or high-risk auto insurance pool. This pool consists of licensed, high-risk drivers who cannot obtain car insurance through the ordinary marketplace. These drivers may have a high number of at-fault accidents, too many traffic citations, or other things that make them high risk.
Is TAIPA Car Insurance Cheap?
If you are a high-risk driver, then you will not be paying ‘cheap’ prices for car insurance even if you qualify for TAIPA.
Remember: TAIPA is for drivers who cannot obtain car insurance anywhere else. For many Texas drivers, TAIPA is their only option for car insurance.
TAIPA’s car insurance is much more expensive than ordinary car insurance for low-risk drivers, which is why it’s the last resort for drivers who have no other option.
How Does TAIPA Car Insurance Work?
If you qualify for TAIPA, then you will still receive car insurance through an ordinary insurance company.
After your TAIPA application is submitted, you are assigned to the high-risk or assigned risk auto insurance pool. Insurance companies in Texas must accept a certain number of drivers from this pool every year. Each company’s quota is proportional to its market share in Texas. If a company like GEICO has a 10% market share in Texas, for example, then 10% of the high-risk TAIPA insurance pool is assigned to GEICO.
Once your TAIPA insurance application has been accepted and processed, you’ll have car insurance through your assigned company.
Your premiums do not change based on your assigned company. If you pay $500 per month for insurance to GEICO through TAIPA, for example, then you would also pay $500 per month to Allstate or State Farm through TAIPA.
In Texas, drivers are required to have minimum coverage limits of 30/60/25. TAIPA car insurance will meet those minimum limits, giving you:
- $30,000 of bodily injury liability coverage per person
- $60,000 of bodily injury liability coverage per accident
- $25,000 of property damage liability coverage
Your assigned company handles everything related to your policy. If you were assigned to GEICO, for example, then you are a GEICO customer. GEICO handles all of your billing, and you contact GEICO’s customer service for any questions.
TAIPA Payment Options
You can pay for TAIPA in several different ways. Some people pay the full annual amount upfront, while others separate premiums into different payment options:
Full Annual Payment: No deposit required
Advance Premium Payment: 25% down payment, balance due within 30 days of billing notice
Premium Finance Company: Signed power of attorney must be attached to the application
Eight Payment Installation Option: 20% down payment, balance paid in eight installments to the company
How to Get the Cheapest Possible TAIPA Car Insurance
TAIPA car insurance is never going to be cheap compared to low-risk car insurance. However, there are some ways to reduce the cost of TAIPA car insurance, including:
Pay in Full Upfront: If you pay your TAIPA car insurance premium in full upfront, then you can avoid paying a deposit.
Maintain a Safe Driving Record: Your high-risk driving status isn’t permanent. The longer you maintain a safe driving record, the lower your risk will be. If you maintain a safe driving record, then you will eventually be able to re-join the normal insurance pool.
Customize Coverage: Under TAIPA, you cannot raise your liability limits beyond the state-required minimums. However, you can add up to $2,500 of personal injury protection or add uninsured/underinsured motorist coverage to your plan.
Drive Outside of Rush Hour and Other High-Risk Times: All car insurance companies penalize drivers for at-fault accidents and traffic citations. Under TAIPA, however, you can also be penalized for non-fault accidents. Drive outside of rush hour to reduce your chances of being penalized.
Final Word on the Texas Automobile Insurance Plan
If you are a high-risk driver struggling to find affordable car insurance in Texas, then the Texas Automobile Insurance Plan (TAIPA) may be the right choice for you.
TAIPA won’t necessarily be “cheap”, but it will provide the insurance you need to legally drive, and you can get it at a more reasonable price than what traditional insurance providers are charging.
