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Texas Auto Insurance Coverage Requirements Explained

In the state of Texas, carrying a personal or commercial auto insurance policy is compulsory for every driver. In order to legally be out on the road as a driver in Texas, there are certain minimum insurance standards your coverage must meet; coverage providers are not even allowed to sell policies in Texas that do not meet these minimum thresholds. The minimum coverage specifications are by no means a guideline for how much insurance you should have as a driver in the Lone Star State: they are just the bare minimum that can get you out on the road. Here we explain the minimum limits of auto insurance coverage for Texas drivers, and provide some definitions of the various types of coverage available.

Required Elements of a Texas Car Insurance Policy

Each Texas driver is required by law to carry at least the minimum mandated coverage types and amounts. Personal liability insurance is mandatory for all drivers in Texas. The state requires a coverage minimum at or above the 25/50/25 threshold [1]. These three numbers refer to the minimum acceptable limits of the three types of coverage included in a basic liability auto policy, expressed in thousands of dollars. The first two numbers are bodily injury insurance minimums, and the third is for minimum property damage coverage.

Texas requires all its drivers to carry both bodily injury and property damage coverage in their auto liability policies. The first bodily injury number is the minimum amount of coverage a Texas driver can have insuring against the injury of one person involved in an accident for which the policy holder is at fault. This minimum in Texas is currently $25,000 for the first person injured in an accident. The money goes toward medical expenses and other costs associated with being involved and injured in such an accident. It is important to note that liability coverage is designed to be paid out to the other driver and passengers, not the policy holder. The way it protects the policy holder is by shielding them from personal financial liability when they are determined to be at fault in a car accident. It helps to prevent (though it does not always stop) them from being sued for lost wages and pain and suffering above and beyond the limits of coverage.

The second number corresponds to the first; it is also for covering the costs associated with bodily injury. The minimum limit in Texas is $50,000 for all victims injured in a car accident for which the policy holder is found to be liable. This coverage comes into play when the other vehicle involved in an at-fault accident has passengers other than the driver, who end up needing medical attention as a result of injuries sustained in the collision.

The third number concerns minimum coverage limits for Texas drivers for property damage, which is currently $25,000. Auto liability property damage coverage takes care of the financial cost of damage inflicted upon the other driver's vehicle as well as other objects, such as buildings or road signs, in an at-fault accident.

In addition to personal liability coverage, Texas drivers who do not own their cars outright are also required to carry comprehensive and collision insurance on their vehicles. Lessees and those who are still paying off a car they are purchasing both fall into this category. Collision coverage pays for the repair or the replacement (if the vehicle is totaled) of the insured vehicle no matter who was at fault in the collision. The amount of replacement coverage is limited to the actual cash value of the vehicle insured, minus the policy deductible. Comprehensive coverage pays for damage to the insured vehicle caused by events other than a car accident. Storm damage, theft and vandalism are some examples of events covered by comprehensive insurance protection.

It is important to note that the minimum coverage requirements for liability coverage in Texas are going up from the current 25/50/25 limits to a new 30/60/30 threshold as of January 1, 2011 [1]. But even when this increase takes effect, the minimum coverage requirements will only be the absolute lowest level of coverage a Texas driver could purchase in order to get their vehicle out on the road legally. This minimum is in most cases not advisable as an appropriate coverage level, unless the driver absolutely cannot afford any additional insurance.

Minimum Coverage Requirements May Not Be Sufficient

As a matter of fact, the 25/50/25 threshold of auto liability insurance really may not be sufficient to protect you as a Texas driver in the event of an at-fault accident. Industry experts usually recommend much higher coverage limits, for the simple fact that actual damages so often far exceed these minimum guidelines. For example, if an injured victim of an accident you are found liable for needs $100,000 worth of medical treatment to recover from injury and your policy only includes the minimum $25,000 in coverage, you most certainly will find yourself in court haggling over the rest. You can save yourself from a potentially financially devastating incident by carrying a few hundred dollars' worth of extra coverage. If you can afford it, it is definitely worthwhile to increase your liability coverage levels, because the minimums just may not cut it.

Optional Coverage Available to Texas Drivers

On top of the required liability insurance and the compulsory comprehensive and collision coverage for drivers with a lien on their vehicles, there are other optional forms of auto policy coverage available to Texas drivers. Uninsured and underinsured motorist coverage are not required by Texas law, but they do have to be offered by state auto insurance carriers. In addition, consumers electing not to include these types of coverage in their policies must say so in writing, according to Texas law.

Uninsured motorist coverage is just what it sounds like: protection for the policyholder against drivers who may be out on the road with no insurance. Likewise, underinsured coverage kicks in when an accident occurs and the financial cost of damages exceed the coverage limits carried by the other driver. Uninsured and underinsured coverage include both bodily injury and property damage elements. The bodily injury portion covers cost of lost wages, medical bills, pain and suffering, and disability or disfigurement. The property damage portion includes coverage for the cost of vehicle repairs, rental cars and deductible expenses. Although uninsured and underinsured motorist coverage are optional and are not legally mandated for Texas drivers, they are certainly an important part of an overall auto insurance policy, and are well worth investing in to protect you on the road. If you can afford to carry this kind of coverage, you ought to at least think about it.

Texas is one of the largest states in the U.S., both geographically and in terms of its population. With so many drivers covering so many miles of roads, the Lone Star State is a great place to drive. But with a high population comes high traffic volumes and a higher risk of being involved in an accident. Protect yourself with a great Texas auto insurance policy that goes beyond the minimum.

[1] Retrieved 2009-12-14.



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