Automobile insurance protects you financially by paying the other driver’s car repair and medical bills if you cause an accident. Depending on the kind of coverage you have, it can also pay to repair or replace your car if it’s damaged or stolen.
Texas has a Consumer Bill of Rights for auto insurance. Your insurance company will give you a copy of the bill of rights when you get or renew a policy.
Is auto insurance required?
Texas law requires you to have liability coverage. If you still owe money on your car, your lender will require you to have collision and comprehensive coverage. There are eight basic auto insurance coverages. You can choose whether to buy the others.
When you buy an auto policy, your company will send you a proof-of-insurance card. You must show this card when you:
- are asked for it by a policy officer;
- have an accident;
- register your car or renew your registration;
- get or renew your driver’s license;
- have your car inspected.
Types of auto coverages
- Liability coverage pays to repair the other driver’s car if you caused the accident. It also pays the other driver’s and his or her passenger’s medical bills and some other expenses. Texas law requires you to have at least $30,000 of coverage for injuries per person, up to a total of $60,000 per accident, and $25,000 of coverage for property damage. This is called 30/60/25 coverage.
Think about buying more liability coverage.
The minimum liability limits might be too low if you cause a multi-vehicle accident or the other
driver’s car is totaled. If you don’t have enough liability coverage to pay for the damages and injuries
you cause, you might have to pay the rest out of your own pocket. The other driver could sue you.
- Collision coverage pays to repair or replace your car after an accident.
- Comprehensive (other than collision) coverage pays if your car is stolen or damaged by fire, flood, vandalism or something other than a collision.
- Medical payments coverage pays your and your passengers’ medical bills. It also pays if you’re hurt while riding in someone else’s car or while walking or biking.
- Personal injury protection (PIP) coverage is similar to medical payments coverage. It pays your and your passengers’ medical bills. But it also pays for things like lost wages and other nonmedical 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 pays if you’re hit by someone who didn’t have insurance or didn’t have enough to pay your medical and car repair bills. It also pays if you’re in a hit-and-run accident. Insurance companies must offer you this coverage. If you don’t want it, you must tell the company in writing.
- Towing and labor coverage pays to tow your car if it can’t be driven. It also pays for labor to change a flat tire or jump-start your battery.
- Rental reimbursement coverage pays for you to rent a car if yours is stolen or being repaired after an accident. Some policies also pay for taxis or ride-hailing services.
Who’s covered by my policy?
Most policies cover you, your family, and people driving your car with your permission. Other policies cover only the people listed in your policy. Ask your agent or read your policy if you’re not sure who your policy covers.
What does my auto policy cover?
Coverages vary by policy and depend on the types of coverages you choose. This table shows some of the things most policies do and don’t cover. Read your policy or talk to your agent to be sure of your exact coverages.
|Most policies cover:||Most policies don’t cover:|
|Car repair, medical, and funeral bills and lost wages and payment for pain and suffering to the other driver and passengers if you cause an accident||Accidents that happen while you’re driving for a ride-hailing service like Uber or Lyft|
|Damage to trees, buildings, fences, street signs, and other property||Accidents that happen while you’re delivering food or other items for a fee|
|Accidents that happen while you or someone covered by your policy is driving a rental car||Accidents that happen while you’re driving a car that doesn’t belong to you but you could use regularly, like a company-owned car|
|Accidents that happen while you’re driving in other states and Canada||Accidents that happen while you’re driving in Mexico|
|Your attorneys’ fees if you’re sued because of an accident||Accidents that happen while you’re driving your car for business|
|Damage to your car because of an accident (if you have collision coverage)||Accidents that happen while you’re racing|
|Damage to your car because of fire, hail, vandalism, theft, flood, flying gravel, and falling objects (if you have comprehensive coverage)||Damages that you caused intentionally|
|Damage to your car if you hit an animal (if you have comprehensive coverage)||Radios, CD players, navigation systems, and other equipment not permanently installed in your car|
What happens if I buy a new car? Is it covered?
If you get a new car, your current insurance will automatically 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 the car with the most coverage on your policy. For example, say you have two cars, one with liability only, and one with liability, collision, and comprehensive coverages. If you buy a third car, it will automatically have liability, collision, and comprehensive coverages.
- A replacement car gets the same coverage as the car it replaces on your policy. For example, if you trade in a car that had only liability coverage, your new car will have only liability coverage.
Tell your company about a new car as soon as you can to avoid a lapse in coverage.
Am I covered if I’m driving someone else’s car?
Rental cars. Rental agencies offer damage waivers and liability policies. The damage waiver isn’t insurance. It’s an agreement that the rental agency won’t charge you for damage to a car you rent.
You probably don’t need the rental agency’s liability policy. Your own auto policy will usually cover you while you’re driving a rental car for personal use. It probably won’t cover you if you’re driving the rental car for work, however.
Before you rent a car, ask your agent whether you need the rental agency’s liability policy and damage waiver.
Borrowed cars. If you cause an accident while driving a borrowed car, the car owner’s insurance pays claims. If the owner doesn’t have insurance, or doesn’t have enough to pay for the damages and injuries you caused, your insurance will pay.
If you don’t own a car, but borrow a car often, you can buy a nonowner liability policy. A nonowner policy pays for the damages and injuries you cause to other people while driving a borrowed car. It doesn’t pay for your injuries or damage to the car you’re driving.