Auto insurance protects you financially by paying for car repairs and medical bills for the other driver if you cause an accident. Depending on the type of coverage you have, it may also pay to repair or replace your car is damaged or stolen.
Texas has a Consumer Bill of Rights for auto insurance. Your insurance company will provide you with a copy of the bill of rights when you obtain or renew a policy.
Is it required to have car insurance?
Texas law requires that you have liability insurance coverage. If you still owe money on your car, your lender will require you to have comprehensive and collision coverage. There are eight basic auto insurance coverages. You can choose if you want to buy other ranges.
When you buy an auto policy, your insurance company will send you proof of insurance card. You must show your card when:
- Requested by a police officer.
- He has an accident.
- Register your car or renew your registration.
- Obtain or renew your driver’s license.
- Your vehicle is inspected.
Types of car insurance coverage
- Liability coverage
- Pays to fix the other driver’s car if you caused the accident. It also pays the medical bills and other expenses of the other driver and his passengers. Texas law requires that you carry minimum coverage of $30,000 for each injured person, up to $60,000 per accident, and $25,000 for property damage per accident. This coverage is known as 30/60/25 coverage.
Consider purchasing more liability coverage.
- The minimum liability limits may be too low if you cause a multi-vehicle accident or the other driver’s car is declared a total loss. If you don’t have enough liability coverage to pay for the damages and injuries you cause, you may have to pay the rest out of pocket. The other driver could sue you.
- Collision coverage pays to repair or replace your car after an accident.
- Other than collision coverage, Comprehensive pays if your car is stolen or damaged by fire, vandalism, or an incident other than a collision.
- Medical payments coverage pays the medical bills for you and your passengers. It also pays if you are injured while riding in someone else’s car or walking or bicycling.
- Personal Injury Protection (PIP) claims protection is similar to medical payments coverage. Pays your medical bills and those of your passengers. But it also pays for other things, such as lost wages and additional non-medical costs. All auto policies in Texas include PIP coverage. If you don’t want it, you must tell the company in writing.
- Uninsured/Underinsured Motorist Coverage (UM/UIM) pays if you are hit by an uninsured driver or do not have enough insurance to pay your medical bills and repair your car. It also pays if you are involved in an accident where the other driver hits and runs. Insurance companies must offer you this coverage. If you don’t want it, you must tell the company in writing.
- Towing and labor coverage pay for towing charges when your vehicle cannot be driven. It also pays for labor charges to change a flat tire or jump-start your battery.
- Car rental reimbursement coverage pays for a car rental if your car is stolen or is being repaired after an accident. Some policies also pay for taxis or other transportation services.
Who is covered by my policy?
Most policies cover you, your family, and the people who drive your car with your permission. Other policies cover only the people listed on your policy. Check with your agent or read your policy if you’re unsure who your policy covers.
What happens if I buy a new car? Is it covered?
If you buy a new car, your current insurance will cover it for about 20 days. The type of coverage depends on whether the car is an additional or replacement car.
- An additional car gets the same coverage as your car with the most coverage on your policy. For example, suppose you have two vehicles, one with liability-only range and the other with liability, collision, and comprehensive coverage, and purchase a third car. In that case, the third car will automatically have liability, collision, and comprehensive coverage. And wide coverage.
- A replacement car gets the same coverage as the car it replaced. For example, if you trade in your older car with only liability coverage, the new car will automatically have superior liability coverage.
Be sure to notify your insurance company as soon as possible to avoid a gap in your coverage.