How Does Texas Car Insurance Work?

Being involved in a Texas car accident is already a stressful event; knowing how Texas car insurance works will be able to ease some stress. Texas is known as an at-fault state, which means that the at-fault driver is responsible for paying everyone injured in the accident. There is a Texas Consumer Bill of Rights* that includes a section about auto insurance. The Consumer Bill of Rights has all you need to know about your rights surrounding Texas car insurance.

Types of Auto Insurance in Texas

1. Liability Coverage

• This type of insurance pays to repair or replace the driver’s car and pays for others’ medical expenses if that driver is at fault for the crash.
• The minimum coverage requirement is $30,000 for each injured person and $60,000 per accident.
• For property damage, the minimum requirement is $25,000.

2. Collision Coverage

• This coverage pays for your car damage regardless of who is at fault.

3. Comprehensive Coverage

• Comprehensive covers for damages caused by fire, hail, vandalism, or theft damage.

4. Personal Injury Protection Coverage

• In no-fault states, this insurance coverage is required, but in at-fault states, it is optional.
• This coverage pays for your medical bills and lost wages up to 80%.

5. Uninsured Motorist Coverage

• UM will pay for your damages, lost wages, and other expenses if the at-fault driver doesn’t have any car insurance coverage.

Most car insurance policies cover yourself, your family, and anyone driving your car with your permission. The Texas Department of Insurance recommends that you check with your insurance company who is covered under your insurance. This will come in handy if you have any young drivers in the family. Teen drivers do not need to be on their own car insurance policy; they can be added to the parent’s insurance policy which is cheaper! Even if they go away to college and no longer live at home, they can still be on the parent’s policy. However, if they attend school outside of Texas, make sure you speak with your insurance company to ensure they will still be covered and adjust accordingly.

What to Expect When Looking for a Policy

Insurance companies look at a few things when deciding how much your auto insurance will cost. They will look into your driving records and claims history, where you live, the type of car you have, your usage of the vehicle, and your credit score. When you are looking for a policy, it is essential to know your rights regarding insurance companies.

Insurance companies cannot turn you down or charge you more because of race, color, religion, national origin, age, gender, marital status, location, and disabilities. If you are being added on to the company’s auto insurance and the company shows that your disability puts you at a greater risk than others, the insurance policy will increase.

If you cannot find a Texas insurance company to sell you a policy, you can get basic coverage through Texas Automobile Insurance Plan Association. You can use TAIPA if you get turned down by two insurance companies. TAIPA sells liability, personal injury protection, and uninsured motorist coverages but only at the minimum Texas requirements.; they do not sell collision or comprehension coverage. The other downside to this option is that TAIPA is more expensive than other companies. TAIPA charges more if you have tickets or were involved in car accidents.

After a Texas Car Accident

If you are in a Texas car accident and need to get a rental car, a rental car agency can offer you car insurance. They provide damage waivers and liability policies for you for more protection or if you don’t have enough or any coverage. Damage waivers are not insurance policies but an agreement. The agency won’t charge you for the damage that may occur when the vehicle is in your possession. If you have your insurance policy, you do not need the liability policy they offer!

If you need to get a new car or get another vehicle, you must inform your insurance company about the change or car update. When adding a car to an existing policy, you need to make sure the policy coverage is enough for both cars. If you get a new car, you must also make sure that you have enough coverage for the new vehicle.

In Texas, the minimum coverage amount is 30/60/25, which is only liability coverage and property damage coverage. This coverage usually is not enough if you experience a car accident. Full coverage refers to a car insurance policy that includes liability and property damage coverage, which is required and includes collision and comprehension. Full coverage also includes higher limits than what Texas requires for car insurance policies.

* Source: Consumer Bills of Rights