Texas Auto Insurance Requirements and Options

01.05.2024 General

       Failing to maintain auto liability insurance can result in tickets and a possible Texas driver’s license suspension. Texas is serious about auto insurance because uninsured auto accidents often create economic disasters. Despite the Texas auto insurance requirement, according to the Texas Department of Transportation (TXDOT), an estimated one in four auto accidents involve an uninsured driver and in 2022, one person was injured every two minutes because of a Texas vehicle crash.         

            What type of personal auto insurance policy is required in Texas?

            The minimum required insurance coverage in Texas is referred to as “liability insurance” and provides coverage for damages you caused to others. A liability policy has two coverages—property damage and bodily injury—with two different amounts. Minimum auto insurance policies in Texas is referred to as a 30/60/25 policy. This means the maximum the insurance company will agree to pay one claimant for bodily injury is $30,000 but no more than $60,000 per crash related to bodily injury. The minimum liability policy also includes a $25,000 property damage limit.  

            This 30/60/25 liability coverage is not enough in today’s world. First, consider the average price of a new car is around $50,000 and the average used car price is around $27,000. Next consider a family of four that requires an ambulance ride to the local hospital for medical evaluation after a head-on collision. Then the mother requires several months of medical treatment because of the auto accident. Applying our 30/60/25 state minimum to the above example highlights the potential economic crisis. A totally destroyed SUV will cost more than $25,000 to replace. The family’s medical treatment will easily exceed the $60,000 bodily injury limits, and this example does not include pain and suffering damages, or other common auto accident damages. Bottom line is that the Texas minimum liability coverage amounts do not provide adequate protection because the cost of living has accelerated over the last few years.                

            What additional insurance coverages do I need to protect myself and family?

            The most common additional coverage for personal auto insurance is Uninsured Motorist and Under Insured Motorist otherwise known as “UM/UIM.” This policy applies one of two ways: either when a tortfeasor does not have valid insurance or the tortfeasor’s insurance policy amounts are too low to cover the damage caused. In one of those two instances, the UM/UIM policy acts as another layer of financial protection in a vehicle collision. Let’s revisit the above family of four in the head-on collision. There, if the family obtained a 30/60/25 UM/UIM policy all damage amounts exceeding the tortfeasor’s 30/60/25 liability policy would be paid through the UM/UIM policy you purchased. So now the family would receive the full value of the SUV by combining the two insurance policies.

            Another great option is to add Personal Injury Protection (PIP) as it can usually be paid quickly compared UM/UIM coverage which may take months or years to resolve. PIP is a type of no-fault insurance meaning the insurance company cannot deny a claim. PIP is commonly offered in $2,500 coverage amounts for medical care cost and/or lost wages. PIP coverage also applies to a single vehicle accident. Insurance companies are required to offer PIP and UM/UIM to customers and obtained a written rejection when the customer declines the additional coverage.                   

            How to navigate the auto insurance marketplace

            There are many different options for auto insurance that can be customized based on the size of your family, the value of your vehicle(s), and the level of protection you desire from liability damages. Large insurance companies will usually have more policy options than small insurance companies and offer free quotes.

             Contact DeKeyzer Law at (713) 904-4004 for a FREE evaluation of your insurance coverage options if you have been injured in a crash.