Texas Auto Insurance FAQ
If you own a car in Texas, the law requires you to carry minimum liability insurance coverage. You’ll need to show proof that you have valid insurance when you get your yearly inspection and when you register your vehicle.
To learn more about the requirements for vehicle insurance in Texas, review the answers to these frequently asked questions.
What Does Auto Insurance Cover?
It depends on the types of coverage you carry. Your insurance may pay for expenses like repairing or replacing your car, medical expenses, court costs, towing and others. The coverage you receive also depends on your deductible, which is the amount you pay before the insurance company pays.
Does Your Policy Cover You Outside Texas?
If you drive in states other than Texas or in Canada, your policy should remain valid. However, if you drive in Mexico, your policy likely will not provide you with coverage; Mexico does not recognize auto liability policies written in the United States.
What if You Can’t Get Coverage?
If you’re unable to purchase a traditional auto insurance policy, you can buy basic coverage from the Texas Automobile Insurance Plan Association. The association offers minimal coverage, including required liability. It does not offer collision or comprehensive coverages.
When Can an Insurer Cancel Your Policy?
If you’ve had your insurance policy for more than 60 days, your insurer can cancel it only if you fail to pay your premium, file a claim that is fraudulent or have your registration or driver’s license suspended or revoked. During the first 60 days, an insurer can cancel a policy for any reason that the law allows, including a driver being in an accident or getting a ticket.
Can You Add Your Children to Your Policy?
In most cases, parents can add their children who drive to their policies; it can be expensive but costs less than buying the child a separate policy. Your policy may require that anyone in your household who drives the car is named on the policy. You should alert your insurer when your children begin driving.
What Is Liability Coverage?
Basic liability coverage meets the requirement for financial responsibility in Texas. It covers certain expenses for people riding in a car that you hit. Expenses are covered up to your policy’s limit and include:
- Costs for funerals and medical expenses.
- Lost wages.
- Pain and suffering.
- Replacement or repair of the vehicle involved.
- A rental car while the damaged car is fixed.
In addition, liability insurance covers the cost of defending you, including paying your attorney, if you are sued. If you’re arrested because of an accident, your liability insurance covers up to $250 toward bail.
What Are the Requirements for Liability Insurance?
To meet Texas’ financial responsibility requirement, you must carry minimum liability insurance of $30,000 for each person who is injured — for a total of $60,000 per accident — along with $25,000 for property damage in any accident.
Who Does Liability Insurance Cover?
Liability insurance in Texas covers you and relatives who live with you, including your spouse, children and in-laws. It also covers other people who you give permission to drive your car, along with family members who are away from home while attending school. A spouse who lives in another home during a separation also is covered.
What Is Proof of Financial Responsibility?
When you purchase an auto insurance policy, your insurer provides you with a card indicating proof of insurance. You are required to display your card when a law enforcement officer asks for it, if you’re in an accident, when you register your car or renew the registration, when your car is inspected, and when you renew your driver’s license.
What Is Collision Coverage?
Collision coverage is required by your lender if you have a loan on your car. It covers the cost of repairing or replacing your vehicle following an accident.
What Is Comprehensive Coverage?
Your lender will also require that you carry comprehensive coverage if you have a loan on your car. Comprehensive pays to repair or replace your vehicle if someone steals it or if it becomes damaged due to fire, hail, vandalism or other events other than a collision.
What Is Personal Injury Protection Coverage?
PIP coverage pays medical expenses, along with 80 percent of your lost income after an accident, regardless of who was responsible for the accident. PIP also pays for hiring a caregiver for someone who has been injured in an accident. Insurers are required to offer you $2,500 in PIP coverage, but you also may buy additional coverage.
What Is Uninsured Motorist Coverage?
Uninsured/Underinsured Motorist coverage pays your expenses if you’re in an accident caused by a driver with no insurance or without sufficient insurance. It also pays in the event of a hit-and-run accident. Insurance companies are required to offer UM/UIM coverage.
Are Other Types of Coverage Available?
You can buy several additional forms of auto insurance coverage in Texas, including:
- Towing and labor.
- Reimbursement for renting a car.
- Stereo equipment.
- New or additional cars.
- Medical and funeral bills that result from an accident.
What Are the Penalties for Violating Car Insurance Laws?
If you fail to have auto insurance as required by Texas law, you can be subject to fines and penalties, including:
- For a first conviction, fines of $175 to $350.
- For additional convictions, fines of $350 to $1,000.
- Potential suspension of driver’s license.
- Potential impoundment of the uninsured vehicle.
Where Can You Learn About Your Rights Under the Law?
The state of Texas maintains a Consumer Bill of Rights relating to auto insurance, and your insurance company is required to give you a copy along with your insurance policy. The document provides information about your rights in Texas.