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When you buy a home, you’re likely paying more than just the down payment and closing costs. You’ill probably also need to purchase homeowner’s insurance. While this coverage is not mandated by law, many mortgage lenders require it before they agree to finance the purchase of your home.

Here’s what first-time homebuyers need to know before shopping for homeowners insurance.

What Does Homeowners Insurance Cover?

Homeowners insurance coverage provides protection for both a home and its contents against damage, theft, and up to 16 named perils, including fire, hail, windstorms, smoke, vandalism, and theft. It also typically includes personal liability coverage for accidents that may happen on the property (think of people slipping and falling down your stairs, or your dog biting a neighbor on the property).

On the flip side, basic homeowners insurance likely won’t cover damage from disasters such as floods and earthquakes, and even war (seriously). Homebuyers who live in an area prone to certain events or natural disasters may want to consider supplemental coverage. In some cases, their lender may even require it.

It’s a good idea to learn what’s generally covered by each homeowners insurance policy type — and what isn’t — to ensure you have the right protection in place.

When You Need to Buy Homeowners Insurance

If buyers plan to get a mortgage to purchase their home, their lender will likely require they obtain homeowners insurance coverage before signing off at closing.

In reality, this is a sound business tactic, as the lender will want to protect its investment, which is the property, not the person it’s lending to (harsh, we know). Let’s say the home is damaged in a windstorm or burns to the ground. Insurance will cover the cost, after a deductible, without burdening the homeowner. The homeowner can then continue to pay their mortgage on time, much to the delight of the lender.

Again, if you live in an area prone to certain disasters like floods or earthquakes, your lender may require additional coverage. Check with your lender on what’s necessary before signing.

If a person’s first home happens to be a condo or co-op, the board may also require specific coverage, thanks to a shared responsibility for the entire complex.

Recommended: House or Condo: Which Is Right For You? Take the Quiz

Can You Forgo Homeowners Insurance?

Technically, there are no laws requiring a person to obtain homeowners insurance, but it’s a rule put in place by many lenders.

If you’re paying cash for a new home, you can forgo purchasing homeowners insurance, though that may be a risky proposition.

Think you can somehow snake the system? Think again. If a lender doesn’t feel that the homebuyer is working hard or fast enough to find homeowners insurance before closing, the lender may go ahead and purchase insurance in that person’s name with what’s called “lender-placed insurance.”

This isn’t as cool as it sounds. Not only will it increase the mortgage payment, lender-placed insurance is typically more expensive than traditional homeowners insurance. And it may not even provide all the protection a homeowner needs or wants.

To give yourself enough time to find the right policy for you, aim to start shopping around a good 30 days before closing.

How Much Coverage a Person Needs

How much homeowners insurance a new homeowner needs will depend on the value of their home and the possessions in it. As a first step, would-be homeowners can ask their agent for a recommended amount of coverage.

After determining that number, it’s also a good idea to take stock of belongings and see if any items may require additional coverage (think expensive antiques, paintings, or other irreplaceable items). It could also be smart to photograph and digitally catalog major items in a home for proof needed on any claims.

Replacement Cost vs. Actual Cash Value

When shopping for homeowners insurance, there’s replacement cost coverage and actual cash value coverage.

Replacement cost coverage pays the amount needed to replace items with the same or similar item, while actual cash value coverage only covers the current, depreciated value of a home or possessions.

This means that if you have actual cash value coverage and disaster hits, you’ll only be able to get enough cash for the depreciated value of the home and items, not the cost of what it may take to replace them.

Most standard homeowners insurance policies cover the replacement cost of a physical home and the actual cash value of the insured’s personal property, but some policies and endorsements also cover the replacement cost of personal property.

The upshot: It’s best to go for replacement cost coverage whenever possible.

Recommended: How Much Is Homeowners Insurance?

The Takeaway

Is homeowners insurance required to buy a home? If you’re taking out a mortgage, that’s almost always a “yes.” It’s worth looking at your options — and understanding what will and will not be covered — so you can feel at ease in your new home for years to come.

Of course, shopping for homeowners insurance often requires considering several options, from the amount of coverage to the kind of policy to the cost of the premium. To help simplify the process, SoFi has partnered with Lemonade to bring customizable and affordable homeowners insurance to our members.

Lemonade is a name you can trust. It has exceptional ratings, is fully licensed, and reinsured by some of the most trusted names on the planet. Plus, it donates any leftover money to nonprofit partners chosen by customers.

Check out homeowners insurance options offered through SoFi Protect.

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SoFi offers customers the opportunity to reach the following Insurance Agents:
Home & Renters: Lemonade Insurance Agency (LIA) is acting as the agent of Lemonade Insurance Company in selling this insurance policy, in which it receives compensation based on the premiums for the insurance policies it sells.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Most states require licensed drivers to carry auto liability insurance — and for good reason. Liability coverage helps pay for the damages to other people involved in a car accident if it’s determined you were responsible.

State law may leave it up to the individual to decide if they want to carry the kind of insurance that will help pay to repair their own wrecked car or injured body. But in most cases, drivers won’t have an option when it comes to liability coverage.

Since your automobile could cause physical or material harm to others, you’ll generally be expected to carry enough insurance to cover those potential costs or, in some states, provide proof of financial responsibility.

What Is Liability Car Insurance?

If you’re found at fault — or “liable” — for an accident, liability insurance helps pay the other driver’s expenses.

There are several other types of car insurance coverage available to drivers, so it’s easy to get them confused. Collision coverage, for example, pays to repair damage to your own car after an accident. And comprehensive coverage helps pay for damage to your car that’s caused by other factors, such as hail, a fire, or theft.

Auto liability insurance is all about the other guy. It’s not there to cover your costs or the costs of anyone who was riding in your car when the accident occurred.

Recommended: How Much Auto Insurance Do I Really Need?

What Costs Does Liability Insurance Cover?

In general, there are two types of liability insurance offered on most standard policies:

Bodily Injury

This type of liability coverage protects the at-fault driver by paying for the other person’s emergency and continuing medical expenses related to the accident. It also might cover loss of income or funeral costs, or legal fees if there’s a lawsuit.

Property Damage

Property damage liability coverage helps pay for repairs to the other person’s car or other property (their home, a business, a fence, a bicycle, etc.) when the policyholder causes an accident.

Are There Limits on What an Insurer Will Pay?

Yes. The amount an insurer will pay for a claim depends on the coverage limits a policyholder chooses. Note that the amount of coverage you’re required to carry varies from state to state, and you might choose to purchase a higher level of coverage than your state mandates.

Coverage caps are usually broken down into three categories:

Bodily Injury Liability Limit Per Person

This is the maximum amount an insurer will pay out for each individual who is injured in a car accident (other than the at-fault driver who is the policyholder).

Bodily Injury Liability Limit Per Accident

This is the maximum amount an insurer will pay overall for medical expenses if multiple people are hurt in an accident. Again, it does not include medical costs for the at-fault policyholder.

Property Damage Liability Limit

This is the maximum amount an insurer will pay to repair any damage a policyholder caused to another person’s property. Any amount over that limit will likely be the responsibility of the policyholder.

How Much Liability Insurance Should a Driver Have?

You cannot buy less than the minimum amount of liability insurance your state legally requires. But some states require significantly less coverage than others.

For example, the minimum liability insurance requirements in California are $15,000 for injury/death to one person, $30,000 for injury/death to more than one person, and $5,000 for damage to property.

But the minimum requirements in Maine are more than twice those amounts: $50,000 per person for bodily injury, $100,000 per accident for bodily injury, and $25,000 for property damage. (A combined single limit of $125,000 will also satisfy the minimum limit requirement in Maine.)

General recommendations from the insurance industry suggest consumers purchase at least $100,000 of bodily injury liability per person and $300,000 per accident.

Keep in mind that when you’re shopping, you may not be able to choose standalone limits for each category of liability coverage. Most insurers set their coverage limits as part of a package, and you may have to make your purchase from those pre-established plans.

For example, a 25/50/10 policy would set the bodily injury limit per person at $25,000, the bodily injury limit per accident at $50,000, and the property damage limit at $10,000. Any costs that exceed those set amounts would be the responsibility of the policyholder.

Some people also consider purchasing an “umbrella” policy that would cover any excess costs if liability limits are exhausted. This type of policy can help protect you from large liability claims or judgments if you’re sued. And your umbrella policy may cover you as well as other members of your family or household.

According to the Insurance Information Institute, the average cost of a claim after a private passenger car accident in 2020 was $20,235 for bodily injury and $4,711 in property damage. But a claim could go much higher, if there are multiple victims, for example, or if there are serious injuries or someone is killed.

Recommended: What Is the Average Monthly Cost of Car Insurance by Age in the U.S.?

What’s the Difference Between Full Coverage and Liability Only?

An auto insurance policy that includes liability, collision, and comprehensive coverage is sometimes called “full coverage,” because it covers both your costs and the costs of others involved in an accident.

Most states require liability coverage. But if your car is paid off, your state may not require collision (which helps to repair or replace a car that’s damaged in an accident) or comprehensive (which pays if the car is stolen or damaged by fire, vandalism or some other non-collision scenario).

And if your car isn’t worth much, you might decide to forgo one or both when purchasing car insurance. If your car is financed, however, the lender could require full coverage even if the state doesn’t.

Some states also may require other types of coverage:

•   Uninsured motorist and underinsured motorist coverage can help cover your medical expenses if you’re in an accident with a driver who has little or no insurance.
•   Uninsured motorist property damage coverage can help repair damage to your car if you are hit by an uninsured motorist.
•   Personal Injury Protection (PIP) and/or Medical Payments (MedPay) can offer protection if you or your passengers are hurt or killed in an accident.

Do You Need Liability Coverage If You Live in a No-Fault State?

A dozen states have instituted “no-fault” laws for drivers. Coverage rules and limits may vary from state to state, so you should be clear on the specifics of what your state requires.

Generally, when you live in a no-fault state and you’re in a car accident, everyone involved files a bodily injury claim with their own insurance company, regardless of who was at fault. Still, every no-fault state requires some level of liability coverage.

Drivers in no-fault states also typically must have Personal Injury Protection (PIP) insurance included in their car insurance policy to cover their own potential medical bills and expenses. PIP plans cover medical expenses for the car’s driver and passengers, which can include hospital bills, medication, rehabilitation, and other injury-related costs.

PIP insurance doesn’t replace bodily liability coverage in every state, and it doesn’t cover property damages. Your insurance company pays for repairs to your car if you have collision coverage. Or you may have to make a property damage claim against the at-fault driver’s insurance.

What If You Have an Accident in Another State?

Ready for a road trip? If you have an accident, your liability insurance may increase to match the minimum limits in whatever state you’re in, and in Canada. But you may want to check with your insurance company if you like to travel, especially if you have a bare-bones policy.

What’s Covered If Someone Else Is Driving Your Car?

The short answer is that the auto insurance covering the vehicle, not the person driving, is usually considered the primary insurance. So if you let someone else drive your car and that person causes an accident, your insurance company probably would be responsible for paying the claim.

Your liability coverage wouldn’t pay the medical bills of the person driving your car or the repairs to your car, although those costs may be covered by other parts of your policy. But it likely would be your liability insurance that pays for the driver of the other car’s medical bills and property damage.

Again, state laws may affect who is responsible in this situation, so it can help to know the rules before letting someone else drive your car.

How Much Does Liability Coverage Cost?

The price you’ll pay for liability coverage could be based on several factors, including how much you buy and where you live. Your age may also play a factor — younger drivers may pay more for coverage, for instance. You can do a little online shopping to search the best rates for your area.

But a better question might be “How much will it cost to bump up my liability insurance beyond the state-mandated minimums?” Getting twice as much coverage won’t necessarily cost twice as much. If the price fits your budget, you may want to consider carrying more coverage than the law requires.

Upping coverage might increase your comfort level, considering the expenses that might be involved in a major accident, even if you have insurance. The extra coverage may cost more, but if you’re a safe driver you may qualify for better rates. You can research car insurance online and compare quotes to find one that fits your budget.

The extra coverage may cost more, but if you’re a safe driver you may qualify for better rates.

The Takeaway

If you’re held responsible for a car accident, liability insurance will help pay the expenses of the others involved. Most states mandate this coverage, including “no-fault” states. But the amount of coverage you must carry may vary from state to state, so when you’re researching automobile insurance, it can be useful to know your state’s rules.

Shopping around for insurance in your area can help you figure out how much coverage you really need and what your premium might be. SoFi’s online auto insurance comparison tool lets you see quotes from a network of insurance providers within minutes, saving you time and hassle.

Compare quotes from top car insurance carriers.

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Insurance not available in all states.
Gabi is a registered service mark of Gabi Personal Insurance Agency, Inc.
SoFi is compensated by Gabi for each customer who completes an application through the SoFi-Gabi partnership.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Despite progress, women, especially mothers, are still fighting hard to achieve equality in the workforce. According to a 2022 Financial Health Network study, 70% of women with children under the age of 18 say they have made significant career changes due to parenting responsibilities, compared to just 55% of men. Those changes include reducing hours, taking a leave of absence, switching to a less demanding job, and quitting a job.

This career instability can have a significant impact on women’s short-term financial wellness, as well as their long-term net worth and future security. At the same time, women leaving the workforce because of work/life balance issues has been a contributing factor in the persistent labor shortage.

One way employers can help women regain ground —- and help solve hiring and retention issues — is to tailor benefits to better fit their needs, priorities, and concerns. Companies that offer benefits packages that help address the gender gaps in financial wellness not only help women stay and advance in the workplace, but also promote a more equitable and productive workforce.

The Great “She-Cession”

Women were struggling with work/life balance and workplace inequities well before the COVID-19 pandemic. But the crisis brought these issues into stark relief. According to a report by the National Women’s Law Center, more than 2.3 million women left work during the 12 months ending in February 2021 compared with 1.8 million men.

Indeed, the pandemic-generated recession was quickly dubbed a “she-cession,” as more women than men left or lost their jobs compared to previous recessions.

Why were women so disproportionately affected? One reason is that many women work in hospitality, education, healthcare, retail, and other industries that were severely impacted by the pandemic. Another is that, as schools shut down, women were often the ones who pulled back from working in order to focus on the care and “Zoom schooling” of their children.

While many women have since returned to the workforce, the recovery has been uneven. Issues like resume gaps, the fact that women typically earn less than men, coupled with the persistent lack of affordable childcare continue to take a toll on the financial well-being of female workers.

What Employers Can Do

HR pros have been working on evening gender disparity for decades, and much progress has been made. But the pandemic shed new light on the stubborn underlying inequities that continue to burden employers and female employees alike.

Employers may find that making adjustments and additions to their benefits packages can help promote more gender equity at work while also allowing them to attract and retain top female talent. Here are some strategies you may want to consider.

Recommended: Measuring the Financial Well-Being of Your Workforce

Rethink Maternity Leave

paid parental leave your firm can offer, generally the better. Some companies are expanding leave for birthing parents beyond 12 weeks, offering as much as 26 weeks. Others are providing additional weeks of paid leave to parents of newborns who spend time in the neonatal intensive care unit.

A generous paid parental leave program not only helps attract female workers but also increases the likelihood that your existing women employees will return to their jobs after having or adopting a child, as opposed to dropping out of the workforce —- and leaving you with a new opening to fill.

Another question to consider is whether your parental leave policies apply to all types of families and parents, such as non-birth mothers, foster parents, and parents who use surrogates. Parental benefits provide an opportunity for building your inclusive benefits strategy.

Create Real Opportunities for Advancement

For every 100 entry-level men promoted to management, only 87 women are promoted, according to McKinsey & Company’s Women in the Workforce 2022 report. With little room for advancement and undervalued work, many women are leaving their employers for better opportunities elsewhere.

One way to counter this trend is to offer female employees a path to advancement through education and up-skilling/re-skilling opportunities. You might do this by offering tuition assistance programs and/or access to free (or discounted) training and certification programs. This can help female employees get ahead in their careers, earn more and, in turn, achieve greater financial stability. It can also propel women into the roles of the future where they are currently underrepresented, like data science, software development, and engineering.

Other initiatives that can improve female career mobility include: formal mentorships, sponsorships, women’s employee resource groups (ERGs), leadership circles, and career coaching workshops. If your company offers these programs, you’ll want to make sure women employees know about and have easy access to them.

Address the Childcare Crisis

When child-care centers shut down during the pandemic, nearly one-third of workers left the industry. Despite the post-pandemic reopening of offices, schools, and other businesses, employment in the childcare sector has not fully bounced back. That translates into many parents, especially moms at lower income levels, staying out of or exiting the workforce simply because they cannot find affordable childcare.

Employers can help fill the gap in several ways. On-site childcare is the most accommodating benefit. But on-site care is a big investment of infrastructure and resources that realistically only a small group of major employers can provide.

One alternative is to offer some type of emergency or backup child care support. Some companies do this by partnering with local daycare facilities and providing access to free or discounted childcare when a regular provider falls through. Other firms are offering employees stipends for online services, such as Care.com and SeekingSitters.com, that provide access to sitters at short notice.

Being open to and evaluating childcare support as you encourage your employees to come back to the office can be just the prompt reluctant employees need to embrace reentry.

Consider Returnships

Many employers are dealing with labor shortages. At the same time, there is a large pool of untapped talent among women who have fully or partially left the workforce. Many of those women want to return to work but find the gaps in their resumes and lack of current skills are holding them back.

To address both problems at once, some companies are offering “returnships.” Pioneered by finance leaders Goldman Sachs and Morgan Stanley, these are internship programs that give returning caregivers the opportunity to brush up their skills or learn new ones. Returnships typically run for a few months, offering training, experience, and networking opportunities to workers – often mothers – who’ve been out of the workforce for an extended period of time.

Returnship programs not only give women who dropped out of the workforce a viable onramp, they also give employers a way to vet talent before making an official hire.

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Address Student Debt

Student loan debt impacts nearly 43 million Americans and a disproportionate number are female. According to EducationData.org, women hold nearly 60% of all outstanding student debt and, despite making higher payments than men, take an average of two years longer to pay off their student loans. Female borrowers are also more likely than their male peers to have student loan debt from graduate school.

Student debt can have a negative impact on any employee’s financial (and overall) well-being. And right now, borrowers are feeling particularly uneasy, thanks to unknowns surrounding the return to repayment for federal loans and potential loan forgiveness. What is certain, though, is that student loan repayment benefits continue to grow in popularity and effectiveness. And, they may be particularly beneficial to female employees.

HR leaders will also want to keep in mind that employers can offer up to $5,250 in tax-exempt student loan repayment benefits through 2025, thanks to the CAREs Act of 2020. What’s more, the recent passage of the SECURE Act 2.0 allows companies to provide employees with a match on their retirement plans for making student loan payments starting in 2024. This can be a stand-alone offering, or part of a broader employee benefits program.

Offer Flexible, Women-Friendly Financial Wellness Benefits

Only one in five working-aged women are considered financially healthy versus nearly one in three working-aged men, according to the Financial Health Network’s 2022 report. The study also showed that women lag behind men in emergency and retirement savings. Only 42% of working-age women said they were confident they will have enough money to live off of in retirement, versus more than half of working-age men (53%).

High levels of debt, trouble making ends meet, worries about saving enough for the future (particularly with gaps in employment), all add a disproportionate amount of stress on women. Financial stress can impact every aspect of women’s lives, including productivity and happiness at work.

HR pros can make a huge impact on women employees by offering personalized, adaptive wellness benefits, such as debt management, emergency savings, tuition savings, retirement planning programs, and financial education. These benefits can help female employees plan and save for the future, feel less stressed about their finances, increase their focus and productivity on the job, and, importantly, change their financial lives for the better.

Recommended: The Future of Financial Well-Being in the Workplace

The Takeaway

Women are a vital part of any employer’s workforce. Benefits packages designed to address women’s specific needs can help employers attract and retain talented female employees. They can also help guarantee women, especially moms, have access to an equal playing field and a secure financial future.

SoFi at Work offers employers the benefits platform, education resources, and financial counseling that can help you assemble packages that help you increase employee productivity, loyalty, and overall well-being.

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Photo credit: iStock/jacoblund

SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For information on licenses, see NMLS Consumer Access (www.nmlsconsumeraccess.org ). The Student Debt Navigator Tool and 529 Savings and Selection Tool are provided by SoFi Wealth LLC, an SEC-registered investment adviser. For additional product-specific legal and licensing information, see SoFi.com/legal. Equal housing lender.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
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The role of the Federal Deposit Insurance Corporation (FDIC) in protecting depositors’ bank accounts is important for everyone to understand.

Most banks are insured by the FDIC, but not all. Moreover, there are usually limits on how much can be covered in an individual person’s accounts and what kind of financial products are eligible for this insurance at all.

Read on to learn the policies and practices of the FDIC and how you can find out the status of your bank.

What FDIC Insurance Means

In 1933, in the wake of the Great Depression, the Federal Deposit Insurance Corporation , an independent agency, was created to protect consumers if the worst happens and a financial institution fails. The agency has shown lasting power. Reports from 4,706 commercial banks and savings institutions insured by the FDIC reflected aggregate net income of $68.4 billion in fourth quarter 2022.

So what exactly does FDIC insurance cover? Typically, all deposit accounts at insured banks up to the limit, currently $250,000 per depositor, per bank, per ownership category, including principal and any accrued interest through the date of an insured bank’s closing. (With the closures of Silicon Valley Bank and Signature Bank, the FDIC has removed the limit for deposits at the shuttered banks.)

Generally, this insurance covers your deposit up to that limit of $250,000 if a bank fails, but it does not cover losses due to fraud and theft.

What FDIC Insurance Does and Does Not Cover

These deposit accounts are covered by the insurance up to the $250,000 limit:

•   Checking accounts

•   Savings accounts

•   Money market accounts

•   Certificates of deposit (CDs)

Important to note: The FDIC does not insure the money you invest in the following products, even if they were purchased from an FDIC-insured bank:

•   Stocks

•   Bonds

•   Mutual fund shares

•   Life insurance policies

•   Annuities

•   Municipal securities

•   Safe deposit boxes or their contents

•   U.S. Treasury bills, bonds, or notes (these are backed by U.S. government)

💡 Tip: Typically, checking accounts don’t earn interest. However, some accounts do, and online banks are more likely than brick-and-mortar banks to offer you the best rates.

How to Learn if Your Bank Is FDIC-Insured

To find out if your bank is insured by the FDIC, go to the BankFind Suite on the FDIC website. The “Name & Location Search” allows you to find FDIC-insured banks and branches from today, to last year, and all the way back to 1934.

The FDIC offers another level of scrutiny for all who are interested. Through its Institutional Financial
Reports , you can find these details on all FDIC-insured banks: locations, comprehensive financial reports, demographic reports, current data, and historical data going back to 1992.

Recovering the Money if Your Bank Is FDIC-Insured

Federal law requires the FDIC to pay deposit insurance “as soon as possible.” For insured deposits — those within the deposit insurance limits — the FDIC almost always pays insured depositors within a “few business days of a closing, usually the next business day.”

The FDIC says, “Payment is made either by providing each depositor a new account at another insured institution or by issuing a check to each depositor.” Note: the FDIC does not guarantee that if the funds move to a new bank they will earn the same interest rate.

The limited exceptions that may take longer to process “primarily are deposits that both exceed $250,000 and are linked to trust documents, and accounts established by a third-party broker on behalf of other individuals,” says the FDIC.

False rumors were spread in the past that people could be forced to wait up to 99 years to get their money back. The agency says, “The FDIC occasionally receives calls from depositors about this myth; it often comes from consumers who attended a financial seminar and heard that the FDIC can and will take up to 99 years to pay the depositor’s insured deposits after a bank is closed. This claim is false and entirely without merit.”

Recommended: How to Keep Your Bank Account Safe Online

Understanding How the FDIC Works

You may wonder where the FDIC gets the money to cover lost accounts after a bank fails.

The FDIC says it receives no Congressional appropriations. It is “funded by premiums that banks and savings associations pay for deposit insurance coverage. The FDIC insures trillions of dollars of deposits in U.S. banks and thrifts — deposits in virtually every bank and savings association in the country.”

The FDIC directly supervises and examines about 5,000 banks and savings associations for “safety and soundness.” Banks can be chartered by the states or by the Office of the Comptroller of the Currency. Banks chartered by states also have the choice of whether to join the Federal Reserve System. The FDIC is the primary federal regulator of banks that are chartered by the states that do not join the Federal Reserve System.

The FDIC also examines banks for compliance with consumer protection laws, including the Fair Credit Billing Act, the Fair Credit Reporting Act, the Truth in Lending Act, and the Fair Debt Collection Practices Act.

Recommended: How Are Financial Institutions Governed?

The Takeaway

The Federal Deposit Insurance Corporation (FDIC) was created by Congress in 1933 to maintain confidence in the American banking system and protect consumers if a financial institution fails. Most U.S. banks are covered by FDIC insurance, but the coverage typically only applies to accounts of $250,000 or less. Checking accounts, savings accounts, money market accounts, and certificates of deposit are covered. Should an insured bank fail, the FDIC will restore those funds up to the limit within a short time.

Better banking is here with up to 4.20% APY on SoFi Checking and Savings.

FAQ

What is the FDIC?

The Federal Deposit Insurance Corporation is an independent agency, created 90 years ago, with a mission to maintain confidence in the nation’s financial system. To keep that system stable, the FDIC insures deposits; examines and supervises financial institutions for safety, soundness, and consumer protection; and manages receiverships.

Is there a limit on how much the FDIC will insure?

Typically, the FDIC insures up to $250,000 per depositor, per institution and per ownership category.

Am I supposed to take out FDIC insurance on my bank account?

No, depositors do not need to apply for FDIC insurance. Coverage is automatic whenever a deposit account is opened at an FDIC-insured bank or financial institution. “If you are interested in FDIC deposit insurance coverage, simply make sure you are placing your funds in a deposit product at the bank,” the FDIC says.

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Photo credit: iStock/ilbusca

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit can earn up to 4.20% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 1.20% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 4/25/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
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If you drive a car in Texas, you’ll need to make room in your budget for car insurance. The state requires it. The amount you’ll pay for protection depends on a number of factors, such as your driving record, age, car type, and insurer. Understanding the cost of coverage in your area can help as you’re comparing quotes. Keep reading to learn more about the average cost of car insurance in Texas.

How Much Does Car Insurance Cost in Texas?

The average cost of car insurance in Texas is $1,842 per year, according to a 2023 U.S. News & World Report analysis of cheap car insurance companies. By comparison, the national average is $1,442 per year.

Average Car Insurance Cost in Texas per Month

The average cost of car insurance in Texas is $153.50 per month, which is $33.33 more than the national monthly average of $120.17. But as the chart below shows, prices can vary greatly among the state’s insurers.

Company	Average Cost Per Month	Average Annual Cost
AAA	$150.42	$1,805
Allstate	$242.75	$2,913
Geico	$111	$1,332
Home State Insurance	$278.42	$3,341
Mercury	$123.67	$1,484
National General	$146.67	$1,760
Nationwide	$131.33	$1,576
State Farm	$98.67	$1,184
Texas Farm Bureau	$73.41	$881
The General	$221.16	$2,654
USAA	$111.08	$1,333

Source: U.S. News & World Report

Average Car Insurance Cost in Texas by City

Where you live can also impact how much you spend on car insurance. The rate of theft, vandalism, and accidents in your area can help insurance providers estimate how likely you are to file a claim, which can raise insurance costs. In the chart below, notice how rates vary even among 10 major cities in Texas.

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City	Average annual cost
Austin	$1,841
El Paso	$1,855
Corpus Christi	$1,867
Fort Worth	$1,890
Plano	$1,891
Arlington	$1,899
San Antonio	$1,927
Laredo	$2,050
Dallas	$2,162
Houston	$2,226

Source: Insure.com

Average Car Insurance Cost in Texas by Age and Gender of the Driver

Usually, teen drivers (aka new drivers) can expect to spend more on car insurance than older drivers. Gender is another consideration. Because women statistically get in fewer car accidents and have fewer DUI incidents, they tend to spend less on car insurance.

Recommended: How Much Does Insurance Go Up After an Accident?

Company	17-Year-Old-Female	17-Year-Old-Male	25-Year-Old-Female	25-Year-Old-Male	60-Year-Old-Female	60-Year-Old-Male
AAA	$4,805	$5,441	$2,042	$2,264	$1,554	$1,587
Allstate	$6,627	$8,044	$3,315	$3,495	$2,641	$2,641
Geico	$2,991	$3,200	$1,407	$1,426	$1,162	$1,325
Home State Insurance	$12,208	$14,935	$3,445	$3,579	$2,919	$3,393
Mercury	$7,052	$8,802	$1,850	$2,066	$1,089	$1,146
National General	$8,039	$9,134	$2,008	$2,228	$1,300	$1,599
Nationwide	$5,486	$7,096	$1,883	$2,062	$1,250	$1,350
State Farm	$3,037	$3,794	$1,216	$1,492	$1,044	$1,044
Texas Farm Bureau	$1,654	$1,908	$1,110	$1,282	$640	$674
The General	$6,043	$7,864	$3,194	$3,637	$2,069	$2,386
USAA	$2,588	$2,821	$1,577	$1,697	$1,138	$1,136
Statewide Average	$5,503	$6,640	$2,095	$2,293	$1,528	$1,662

Source: U.S. News & World Report

Related: How to Buy Car Insurance in 5 Simple Steps

Average Car Insurance Rates After an At-Fault Accident

Your driving record plays a big role in the auto insurance rates you’re offered. In general, the better someone’s record is, the less they’ll spend on insurance. This table compares how much someone can generally expect to spend on car insurance in Texas when they have a clean record and after just one at-fault accident.

Type of Policy	Clean Record Premium	After One At-Fault Accident Premium
Full Coverage Car Insurance	$1,316	$2,048

Source: MoneyGeek.com

Average Car Insurance Costs for Good and Bad Credit

Some insurance companies examine applicant credit scores when determining rates, as certain credit behaviors can indicate how likely someone is to file a claim. Rates can increase for drivers with lower credit scores. See how the average cost of full coverage car insurance in Texas differs between drivers with good and bad credit scores.

Type of Policy	Good Credit Premium	Bad Credit Premium
Full Coverage Car Insurance	$1,023	$2,344

Source: MoneyGeek.com

What Else Affects Car Insurance Costs?

Other factors that can affect car insurance costs include:

How Much You Drive

The more someone drives, the more likely they are to get in an accident simply because they are on the road more often. As a result, driving more miles can lead to higher insurance prices.

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Make and Model of Your Car

When setting a rate, insurance companies often consider how expensive it would be to repair or replace the driver’s car. The higher these costs are, the more the driver will likely pay for coverage.

Amount of Coverage

How much car insurance do you need? The amount may be based on your personal preference or your state’s minimum car insurance requirements. But in general, the more coverage you have, the more expensive your policy will likely be.

Related: Car Insurance Terms, Explained

How to Get Affordable Car Insurance

Looking to lower your car insurance costs? Consider these tips and tricks for finding a more affordable car insurance policy.

Compare Quotes From Different Insurers

There’s no need to accept the first quote you’re offered. Instead, shop around with a few different car insurance issuers to see which can offer the most coverage for the best price.

Recommended: How to Get Car Insurance

Choose a New Car Carefully

If you’re shopping for a new car, you may want to factor in the cost of insurance. The Insurance Institute for Highway Safety shares helpful information on its website, iihs.org, about the cost of insuring different makes and models of cars.

Consider Whether a Higher Deductible Is Right for You

Choosing a higher deductible often means spending less on monthly premiums. However, it’s important to select a deductible you’ll be able to pay if you ever do need to file a claim.

Ask for Discounts

From taking a defensive driving course to earning good grades as a college student, there are many different reasons insurance companies offer discounts. It can’t hurt to ask your insurer if you qualify for any discounts.

Recommended: How to Lower Car Insurance

The Takeaway

The average cost of car insurance in Texas is $1,842 per year, or $153.50 per month. The amount you’ll spend on car insurance depends on several factors, including your driving record, age, gender, location, credit score, and insurer.

Feeling uncertain about how much auto insurance you really need or what kind of premium you might have to pay to get what you want? Check out SoFi’s online auto insurance recommendations. The better you drive, the more you can save.

FAQ

How much is car insurance in Texas per month?

The average cost of car insurance in Texas is $1,842 annually. This breaks down to $153.50 per month.

Is car insurance expensive in Texas?

According to the Insurance Information Institute, the average price of car insurance in Texas is higher than the national average but lower than other states in the South, including Louisiana, Mississippi, Florida, and Georgia.

Is $300 a lot for car insurance?

In many cases, the average monthly cost for coverage in Texas is well below $300. But remember, the amount you pay depends on a number of different factors. A 17-year-old woman, for example, could very well pay more than $300 per month largely because of her age and lack of driving experience.

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Photo credit: iStock/lightkey

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