Nearly every state in the U.S. requires drivers to have automobile liability insurance. If a driver causes an accident, their liability insurance should pay the medical expenses and property damage for the other driver and passengers. Motorists have several options for insurance coverage from liability-only to full coverage, and even uninsured or underinsured motorist coverage. Understanding the Texas requirements for car insurance is a must for all drivers. Not knowing the correct information could cost you a bundle.
Auto Insurance Requirements per Texas Law
In Texas, the law is very straightforward when it comes to what happens when you have an accident. If you cause the accident, you should have to pay for it. To ensure that motorists comply with this law, the state requires all drivers to carry liability insurance.
When a person has taken out a loan to purchase a car or truck, that lender may require full coverage on that vehicle for the life of the loan. Some people think that this is state law. It is not. It is just a policy of that particular lending institution and Texas law does not play a part in it. The only insurance that the State of Texas requires of motorists is liability insurance.
Liability Insurance in Texas
All vehicles in Texas must have liability insurance coverage. The insurance liability limits must meet the financial responsibility law of the state. At this time, Texas requires that all vehicles carry 30/60/25 coverage, which means, per accident:
- $30,000 per injured person
- $60,000 total coverage for injured people in an accident
- $25,000 total coverage for property damage
These limits are often insufficient for covering an accident beyond a simple fender-bender. If you are at fault, you could be sued by the other driver for what your insurance did not pay. Many drivers prefer a little extra financial protection by opting for insurance that is more than the minimum limits.
If you are sued because of the accident, your liability insurance will pay your attorney fees and defense costs. If you were arrested as a result of the accident, up to $250 will be paid for your bail through your policy.
A common misconception people have about their own liability insurance is that it pays for their medical bills, car repair, or car replacement for the insured in the event of an auto accident. It does not. It only pays for damages and injuries that the other driver sustains when you are at fault. There are other types of insurance coverage that protects you if you are injured in an accident: comprehensive, collision, uninsured/underinsured motorist, personal injury protection, and medical payments.
What is Proof of Financial Responsibility?
The proof of financial responsibility is what many people refer to as an “insurance card” or “proof of insurance card.” Every driver should have access to this information when they are operating the insured vehicle.
Under Texas auto insurance law, a driver is required to show their proof of financial responsibility card in certain situations:
- When a police officer asks to see it
- When you register your car
- When you renew your car’s registration
- When you get your car inspected
- When you get your driver’s license
- When you renew your driver’s license
- When you have an accident
The Texas Consumer Bill of Rights for Auto Insurance requires all insurance companies to give their insureds a copy of this card with their policy. So if you have a Texas auto insurance policy, you should have a proof of insurance card.
Texas Auto Accident Uninsured and Underinsured Motorist Coverage
If you are in an accident that was the other driver’s fault and they either don’t have liability insurance, they don’t have enough insurance to cover your injuries and damage, or if it was a hit and run, you could find yourself paying out of pocket for many of your bills. Uninsured and underinsured motorist coverage is an optional add-on coverage that pays in these circumstances. There are two types:
Bodily Injury UM/UIM
There is no deductible and it pays for your medical bills, pain and suffering, lost wages, partial or permanent disability, and disfigurement.
Property damage UM/UIM
After the mandatory $250 deductible, property damage UM/UIM coverage pays for your auto repairs, if items in your car were damaged, and even a rental car while yours is being repaired.
This type of insurance covers you (the insured), your family members, people who were driving your car (with your permission) at the time of the accident, and passengers in your vehicle.
Insurance companies are required to offer UM/UIM coverage, but you are not required to purchase it. If you don’t want it, you will have to provide that rejection in writing. Usually the company will just have you sign a document stating that you are rejecting the coverage. If you are ever injured by an uninsured or underinsured motorist, and you do not have UM/UIM coverage, you should still contact an experienced Austin Personal Injury Lawyer right away. If your insurance company cannot produce the signed rejection form for UM/UIM coverage, we can help you access the coverage you need to recover from your injuries.
Contact Our Experienced Attorneys
If you have been injured in an accident caused by a negligent driver and want to know what your rights and responsibilities are, we can help. Contact The Cagle Law Firm today and get the help you need. We offer free consultations, and you will never pay attorney’s fees out of your pocket, we only get paid attorneys’ fees if we win your case.