Texas Auto Insurance Coverage: 8-Points of Coverage
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Ron Trumbo
Insurance Editor
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Texas is a reasonable state for car insurance, but the state's minimum requirements are simply not enough coverage for most people. Texas drivers must have at least 30/60/25 auto liability coverage. The means that your minimum auto liability limits must be at least $30,000 for each injured person, up to $60,000 for all people involved in an accident. Finally, you must have at least $25,000 in property damage insurance for each accident.
InsuranceLoco is an insurance information resource that believes all Texans should not fall in the trap of simply buying the state minimums. Have a few 5-minute conversations with licensed Texas insurance agents and tell them that you’re trying to save money on car insurance, but you also want to make sure you have enough auto coverage.
Why Texas Auto Insurance Minimums May Not Be Enough Coverage
Imagine the most common fender bender where you might rear-end another car. What if that car is carrying a family of five and all of the passengers are critically injured; $60,000 in coverage may not be enough to pay for medical car, let alone property damage. The other insurance company would most likely liquidate your assets as much as possible to recover any settlement. What if you own a house, have a solid savings account, or some investment? Could you manage losing everything you have, just to save a little bit of money in the short term?
Texas’ Personal Automobile Policy: 8-points of Coverage
In Texas, many car insurance agents offer Texas’ Personal Auto Policy, which includes 1.) Liability coverage; 2.) comprehensive coverage; 3.) Collision coverage; 4.) Medical payment coverage; 5.) Underinsured/uninsured coverage; 6.) Towing coverage; 7.) Rental reimbursement coverage; and 8.) Personal injury protection coverage.
1. Texas auto insurance liability coverage
As mentioned above, Texas requires at least 30/60/25 auto liability coverage. Liability coverage makes sure that if you’re responsible for a car accident in Texas, you’re able pay for the medical and property damage of the people in the other car, including lost wages, pain and suffering, and attorney fees. Make sure you ask your insurance agent who liability insurance covers. Some policies will cover other people driving your car, while other policies will have very specific language spelled out in the policy's declarations. Talk to your Texas insurance agent about your unique conditions.
2. Texas auto insurance collision coverage
Collision coverage pays for property damages to your car. Depending on the age and value of your car, collision coverage is unique to every driver. Some Texans elect not to carry collision, while others are required by their bank/lender if they are financing the car. For more information, please see InsuranceLoco's article: When Does It Makes Sense to Drop Comprehensive and Collision Auto Insurance Coverage?
3. Texas auto insurance comprehensive coverage
Comprehensive auto insurance pays you for damages to your car or truck caused by anything other than a collision. Requiring a deductible, common comprehensive claims include car theft, damage cause by vandalism (having your tires slashed or paint "keyed”, and broken windows. The coverage levels you need for comprehensive coverage in Texas are unique to every driver, which an insurance agent can help you determine.
4. Texas auto insurance medical payments coverage
Some insurance agents consider medical payments coverage to be redundant to standard health insurance policies, but medical payments coverage protects a lot of different things. Specifically, it covers not only you, but in many cases other passengers in your car. Medical payments coverage helps with hospital and doctor visits, ambulance trips, funeral costs, and much more. You need to review your auto policies declaration page to truly understand every medical event covered.
5. Personal Injury Protection (PIP) Coverage
Similar to medical payments coverage, personal injury protection is frequently referred to as “no fault” coverage, because it covers your medical bills and any lost wages regardless of fault in an accident. Texas is one of 16 states that requires PIP coverage. In Texas, your auto insurance company is supposed to make at least $2,500 in coverage available. As far as we know, you are allowed to refuse PIP in Texas, but you’ll have signed a refusal waiver. As always, it’s critical to have a conversation with a licensed Texas insurance agent to truly make a sound decision with your unique coverage needs.
6. Uninsured/Underinsured Motorist (UM/UIM) Coverage
As reported in InsuranceLoco’s article: 15% of Texas Drivers Opting to Drive Without Insurance — Why You Need Uninsured/Underinsured Coverage, uninsured/underinsure motorist protection is almost like buying a liability policy for any other driver that could be at fault in an accident with you, making sure that you’ll be made whole regardless of their auto insurance coverage.
7. Towing and Labor Coverage
Similar to what you may already have in your roadside assistance program (e.g. AAA card), towing coverage is almost always included in auto insurance quotes. Towing services can be expensive, therefore, InsuranceLoco recommends that you have some type of towing service available, whether you include it in your auto insurance policy, or you buy a separate roadside assistance membership.
8. Rental Reimbursement Coverage
When your car is damaged in an accident to the extent that repairs will take more than a day, you may elect to rent a car as an alternative means of transportation. In Texas, rental reimbursement coverage does exactly was it says; it pays (up to a certain amount) for your rental car. |
