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Texas Car Insurance Laws & State Minimum Coverage Limits

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Eric Stauffer is a former insurance agent and banker turned consumer advocate. His priority is to help educate individuals and families about the different types of insurance they need, and assist them in finding the best...

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UPDATED: Feb 4, 2018

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Texas State FlagAll drivers in Texas are required by law to carry a minimum amount of auto insurance coverage to provide financial responsibility in the event of an accident. Texas has a number of laws governing the amount of insurance you are required to have and penalties for failing to carry insurance, and it’s important that all drivers are aware of those laws.

Required Coverage & Limits

Texas law requires all drivers to carry a state-mandated minimum for liability coverage. Drivers must have $30,000 per person and $60,000 per incident in bodily injury liability coverage, as well as $25,000 in property damage coverage. This is generally shortened to 30/60/25, and you will likely see it written that way on your policy.

  • Bodily Injury Coverage – This coverage pays for injuries to passengers and other drivers. The Texas state minimum will provide you with $30,000 for one individual injured person, and a total coverage limit of $60,000 for all injured parties, no matter how many people are involved.
  • Property Damage Coverage – This coverage pays for repairs or replacement of another person’s vehicle or any other personal property that is damaged as the result of an accident where you are found at fault. The minimum policy limit of $25,000 applies to the total damage, no matter how many vehicles or other property are involved.

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Optional Texas Insurance Coverage

While liability is the only coverage required by law, most Texas drivers choose to add optional coverage to their policy for added protection. In addition to increased liability limits, which are strongly recommended, Texas insurance companies offer a wide range of options to suit each driver’s needs.

  • Collision Coverage – This coverage pays for damage to your vehicle in the event that you are found at fault in an accident, including repairs and replacement in a total loss. You are responsible for a deductible when using this coverage, which you will select when purchasing a policy.
  • Comprehensive Coverage – Damages that are not the result of an accident are covered under comprehensive. This includes rock chips to windows, theft, and vandalism. This coverage is also subject to a deductible.
  • Personal Injury Protecting (PIP) – This provides medical payments and loss of income to any injured party who was in your vehicle in an accident regardless of fault. Although it is not a required coverage, Texas law states that drivers must reject this coverage in writing or accept a minimum of $2500. Higher coverage levels are available.
  • Medical Payments Coverage – Like PIP, this coverage provides additional medical payment assistance to anyone injured in your care in an accident, regardless of fault.
  • Uninsured/Underinsured Motorist (UM/UIM) – If you are involved in an accident with another driver who is uninsured or whose insurance is not adequate to cover damages, this optional coverage can pay for bodily injury and property damage. The property damage section of this coverage is subject to a deductible of $250. As with PIP coverage, Texas law requires that drivers reject UM/UIM in writing.
  • Roadside Assistance – This provides coverage for towing or for other roadside needs such as a flat tire, running out of gas, or locking your keys in your car.
  • Rental Reimbursement – If you need a rental car during repairs to your car under a covered claim, this coverage can help to pay the cost of the rental.
  • Other Optional Coverage – There are a variety of other coverage options available to Texas drivers, which may vary by insurance company. These include coverage for property in the car such as stereo equipment, which can be purchased as needed.

Proof of Insurance & Texas Law

Texas law requires all drivers not only to have insurance but also to provide proof of that coverage in the form of an insurance card upon request. There are several instances in which you are required to present your insurance card.

  • Upon request by a police officer during a traffic stop
  • At the scene of an accident in which you are involved
  • When registering a car or renewing registration
  • When renewing your driver’s license
  • When the car is being inspected

There are penalties for failing to provide proof of insurance, which increase in severity based on the number of offenses and the circumstances. For a first offense, you may be fined between $175-$350. Additional offenses carry fines between $350-$1000 and may also result in your car being impounded and your license suspended.

If you are caught driving without a license and without insurance, the fine can go up to $2000 and you may spend up to 180 days in jail. A driver who is involved in a serious accident causing injuries or death faces up to a $4000 fine and up to one year in jail, in addition to being held financially responsible for damages.

After an accident without insurance, you will be required to file an SR-22, which is a Financial Responsibility Insurance Certificate, with the DMV. This document verifies that you are in compliance with state minimum insurance laws. If your insurance coverage lapses for any reason, the insurer will notify the DMV.

TexasSure

In order to help reduce the estimated 20 percent of Texas drivers who are uninsured, the Texas DMV worked with other agencies to create the TexasSure system. This registry allows law enforcement to easily confirm whether or not a vehicle is insured.

Drivers may receive a notice from TexasSure of insurance records that do not match vehicle information. Updating information in a timely fashion with your insurance company, such as when you buy a new vehicle, may prevent this.

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Teen Drivers in Texas

A newly licensed teen driver will be required to carry the legal minimum for insurance. New drivers in Texas follow a graduated licensing program in which they will begin with a learner’s permit. This permit is earned after taking a written test, and drivers must have an approved, licensed driver such as a parent or instructor in the vehicle at all times.

After a minimum of 6 months and upon turning 16, teen drivers can take the road test for a provisional license. This license includes a set of restrictions:

  • They may not drive between midnight and 5 a.m. except for work, school, or in an emergency
  • They may not use a wireless device, even hands-free unless it is an emergency
  • They may not carry more than one passenger who is under 21, with the exception of family

Although the license is considered provisional until the driver is 18, the driver must carry auto insurance from the time of passing the road test. Insurance companies do not require drivers with a learner’s permit to be listed on the policy, but do require it for provisional and fully licensed drivers.

While it is possible for a teen driver to take out an auto insurance policy in his or her own name, rates are generally much lower when added to a parent’s policy. You can keep your teen driver on your policy while they are away at school, as long as the teen’s permanent address remains the same as the parent’s. The Texas Department of Public Safety offers new driver training courses that can earn your teen driver a discount on their insurance.

Buying Car Insurance in Texas

In a 2017 study by Insure.com, Texas ranked as the 10th most expensive state for auto insurance, with an average annual rate of $1506. There are hundreds of companies offering insurance in Texas at various rates and with different rating rules, allowing Texans to shop around for the best policy and price.

The Texas Department of Insurance (TDI) top 40 list of insurers in the state for 2015 shows that national insurer State Farm is by far the top seller of policies in the state, with more than 16% of the market share. The closest two companies behind State Farm are Farmers and Progressive, each with around 8.5% of the share.

TDI handles complaints registered against insurance companies in Texas and has a searchable database for information. TDI also has a Fraud Unit which handles reporting of auto insurance related fraud, one of the top causes of inflated car insurance rates in the state.

High-Risk Auto Insurance

Texas insurance companies are required by law to provide fair and reasonable access to insurance policies and must generate their insurance rates in accordance with this law. Companies are permitted to rate based on a variety of factors that include driving history, home address, type of vehicle, and your credit score.

The Texas Automobile Insurance Plan Association (TAIPA) offers a special insurance program for high-risk drivers who are unable to qualify for insurance elsewhere. These policies are more expensive than standard insurance but ensure that all drivers are financially responsible.

For a list of companies that we recommend, visit our Best Insurance Companies page.

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About Eric Stauffer

Author: Eric StaufferI am a former insurance agent and banker turned consumer advocate. My priority is to help educate individuals and families about the different types of insurance they need, and assist them in finding the best place to get it.

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