Texas Car Insurance
Need to learn about car insurance in Texas? We’ve got all the information you’ll need. Keep reading for information on required coverage, penalties for driving uninsured, important coverage decisions, and more.
Mandatory Insurance Law
Texas is a “tort” state that requires all drivers to have car insurance.
Do you need insurance to get a Texas driver’s license? Yes, according to the Texas Department of Public Safety. When you first get a license, you must provide proof of insurance or a statement saying that you don’t own a car.
You’ll also have to prove that you have insurance when you:
- Are asked for it by the police
- Get into an accident
- Register your car or renew its registration
- Have your car inspected
Minimum Texas Coverage Requirements
Texas law sets standards that all auto insurance policies must meet. Every policy must include a minimum amount of liability coverage. The following table breaks down the requirements.
|Required coverage types||Minimum amount of coverage|
|Bodily injury liability||$30,000 for each person’s injuries in an accident|
|$60,000 total for all injuries in an accident|
|Property damage liability||$25,000 total per accident|
How Liability coverage works
When someone driving your car causes an accident, liability coverage pays for any victims’ medical and repair bills. However, it only pays up to a certain amount. Minimum policies include $60,000 worth of coverage total for medical bills and $25,000 for property damages. If you get the minimum amount of liability insurance, you may see it referred to as 30/60/25 coverage. You can buy more than the minimums to be better protected.
Remember, liability doesn’t cover the driver’s hospital bills or car repairs. It only covers those costs for accident victims.
Previous coverage requirements
The current minimums required by the state went into effect on January 1, 2011. Before that date, the minimums were 25/50/25.
Electronic Proof of Insurance
Texas drivers have the option of using electronic documents to prove they’re insured. The Lone Star State electronic proof law went into effect in May 2013.
For the electronic document to be valid proof of insurance, it should clearly state all of the following:
- Name of the insurer
- Insurance policy number
- Policy period
- Name and address of each insured driver
- Policy limits
- Make and model of each covered vehicle
Driving Without Auto Insurance
Penalties for Driving Uninsured
If you break the law and don’t buy coverage, it could cost you. You could get stuck having to pay other people’s hospital and repair bills if someone crashes your car. You could also get your car impounded and your license and registration suspended. In addition, you could have to pay more than $1,000 in fines and fees.
|Number of Offenses||Fine||License & Registration Suspension||Impound Fees|
|1st||$175 – $250 one-time fine + $250 annual fine for 3 years||None||None|
|2nd & Subsequent||350 – $1,000 one-time fine + $250 annual fine for 3 years||Until coverage is in place & an SR-22 has been filed||$15 per day|
The penalties get more serious in certain situations, according to the Texas Department of Insurance. If you don’t have a license while driving uninsured, you could be fined up to $2,000, spend 180 days in jail, or both. If you get into an accident that causes serious injuries or death while uninsured, you could be fined up to $4,000, spend a year in jail, or both.
TexasSure Coverage Verification System
TexasSure is a system that helps state officials identify vehicles without insurance. The system’s goal is to increase enforcement of the car insurance law and lower the number of uninsured drivers. The state Legislature created it in 2008.
TexasSure works by combining two sets of data: vehicle registrations from the DMV and insurance policy info from insurers. The system checks whether vehicles registered in the state match up with valid insurance policies. If they don’t, there’s a good chance they’re uninsured. If a car is flagged as uninsured in the database, the state contacts the owner to follow up.
About 15% of vehicles registered in the state had no matching insurance policy on file as of December 2013, according to TexasSure.
In addition to liability coverage, there are optional coverages you can add to your policy. They’ll raise the cost of your insurance, but they’ll also provide greater protection. The following are the most widely available coverage add-ons in the state.
It pays for repairing or replacing the insured car if it’s damaged by something other than a collision. Some examples of this type of damage are vandalism, hail damage, and theft. More than 7 out of every 10 Texans bought comprehensive coverage in 2011.
It pays for repairing or replacing the insured vehicle after an accident. More than 2 out of every 3 Texans bought collision coverage in 2011.
Uninsured/underinsured motorists (UM/UIM) bodily injury
It pays your medical bills and the medical bills of your family and passengers after an accident. It does so when the driver who caused the accident:
- Doesn’t have insurance or fled the scene of the accident
- Has insurance, but not enough to cover all your medical bills
Insurers are required to include UM/UIM in your policy automatically, but you can reject it in writing, according to the Consumer Bill of Rights.
Uninsured motorists (UM) property damage
It pays your repair bills if the insured car was damaged by a driver who doesn’t have car insurance or fled the scene of the accident.
There is a mandatory $250 deductible for these claims, according to officials.
It pays your accident-related medical and funeral bills. It also does so for your family members and passengers. It provides coverage no matter who caused the accident.
Personal injury protection (PIP)
It pays your accident-related medical and funeral bills, plus 80% of lost income and the cost of hiring a caregiver. It also covers these expenses for your family members and passengers. It provides coverage no matter who caused the accident.
If you buy PIP, you must buy at least $2,500 in coverage.
Insurers are required to include PIP in your policy automatically, but you can reject it in writing, according to the Consumer Bill of Rights.
It pays for renting a car after an accident.
It pays for towing and labor due to a mechanical breakdown.
It pays the difference between an insurance company’s payment for a totaled car and the remaining balance on the car’s loan or lease.
Protecting Your Car From Hail Damage
Texas is one of nation’s hardest-hit states when it comes to hail claims. These claims can be a serious expense. Between 2008 and 2011, the average hail claim in Texas was $2,971, according to the Highway Loss Data Institute (HLDI).
There were more than 130,000 hail claims in the state between 2008 and 2011. All together, those claims cost insurers $399.3 million.
If you want to have protection for hail damages, you’ll need to buy comprehensive coverage. It will also cover damage from other weather events, such as tornadoes. If you don’t add it to your policy, repairs won’t be covered.
Protection From Drivers Without Insurance
Statewide, about 15% of drivers are uninsured. In some areas of the state, the percentage is even higher. In Hidalgo County, for example, about 23% of drivers are uninsured, according to TexasSure data.
If the person who injures you in an accident doesn’t have insurance, you may need to rely on your own policy. But not all people have the coverage they need. The minimum coverage required by the state doesn’t include protection for these situations.
The following optional coverages will pay for medical bills for you, your family, and any passengers if they were injured by an uninsured driver:
- Uninsured motorist
- Medical payments
- Personal injury protection
The following optional coverages will pay for repairing your car if it’s damaged by an uninsured driver:
- Uninsured motorist property damage
If you don’t have any of the coverages listed here, you might not be able to get your medical bills and or property damages covered after an accident with an uninsured driver.
How Claims Work
Texas uses a “tort” system for car insurance claims. That means if someone injures you or wrecks your car, their liability insurance pays your medical and repair bills.
But in some cases, the other driver won’t be 100% responsible for the accident. Your actions could have contributed to the accident, and you could be partially responsible. This makes things a little more complicated.
If you’re partially responsible, it reduces the amount you can get from the other driver’s insurer. Texas uses modified comparative fault to sort this out. Here are the details:
If you’re at least 51% responsible for the accident: The other driver’s insurer doesn’t pay any of your bills. You have to completely rely on your own policy.
If you’re less than 51% responsible for the accident : The other driver’s insurer will pay your bills. But the amount they pay will be reduced by your percentage of fault. For example, if you’re 20% responsible for an accident, the other driver’s insurer doesn’t pay 100% of your bills. Instead, it pays only 80%, since you were 20% responsible. So in this example, if you have $10,000 in bills from an accident, the other driver’s insurer has to pay only $8,000.
So what if the other driver’s insurer doesn’t pay your bills? You use your own policy. Medical payments and PIP coverage will help pay your medical bills. Collision will help pay your repair bills. But both of those coverages are optional. You’ll be on your own if you didn’t add them to your policy.
Texas Auto Insurance Rates
If you’re coming from another state, you may find it hard to get cheap Texas car insurance. The average cost of a policy in the state was 10.2% higher than the 2011 national average. That makes it the state with the 14th-highest average coverage costs in the country.
How Credit Affects Premiums
Insurers in Texas are allowed to raise or lower your prices based on your credit history. This process is known as “insurance scoring.”
As of July 2013, only four car insurers in the state didn’t use some form of credit-based insurance scoring, according to officials.
If you drive safely, infrequently, or both, you may want to look into a usage-based discount program. These programs use a device you install in your car to track how far it’s driven and/or if it’s driven safely. Depending on how you drive, you could potentially get a discount of up to 30%.
The following major insurers offer usage-based discounts in the Lone Star State:
- Progressive: Snapshot
- Esurance: DriveSense
Texas Automobile Insurance Plan Association
The Texas Automobile Insurance Plan Association (TAIPA), is the Lone Star State’s insurer of last resort. If you’ve had a hard time finding a car insurer who will cover you (usually because of marks on your driving record), you can still turn to TAIPA. It’s meant to cover the state’s high-risk drivers.
Did You Know?
According to one study, Texas drivers have the 14th-highest average car insurance rates in the country. The average premium in Texas was about 10% higher than the national average in 2012.