Texas law requires you to have auto liability
insurance, and if you still owe money on your car, your lender
requires that you also carry collision and comprehensive
coverage. Auto insurance pays for damages, injuries, and other
losses specifically covered by your policy. Read your policy
carefully to know exactly what it covers. Pay special attention
to the exclusions section, which lists the things your policy
does not cover. The front page of your policy is called the
declarations page. It contains useful information such as the
exact name of your insurance company, your policy number, and
the amount of each of your coverage and deductibles.
Auto Insurance Coverage and Consumer Bill of
Rights
Texas Requires Proof of Financial
Responsibility
If you drive in Texas, you must show that you can pay for
accidents you cause. Most Texas drivers do this by buying auto
liability insurance. Texas law requires minimum coverage of
$20,000 per injured person, up to a total of $40,000 for
everyone hurt in an accident, and $15,000 for property damage.
This basic coverage is called 20/40/15 coverage. However, basic
coverage might not be enough if you are held liable for an
accident. You should consider buying more than the basic limits.
When you buy an auto policy, your insurance company will send
you a proof-of-insurance card. You will have to show proof of
insurance when you are asked for it by a law enforcement officer
have an accident register your car or renew its registration
obtain or renew your driver's license get your car inspected.
Texas law provides severe penalties for violating the state's
financial responsibility laws. A first conviction will result in
a fine between $175 and $350. Subsequent convictions could
result in fines of $350 to $1,000, suspension of your driver's
license, and impoundment of your automobile.
Auto Insurance Coverage
The Texas Personal Automobile Policy offers eight types of
coverage. Texas law requires you to have basic liability
coverage. The other coverages are optional, but if you still owe
money on your car, your lender will require you to have
collision and comprehensive coverage. The following describes
the eight types of coverage available in the Texas Personal
Automobile Policy. Auto insurers may offer alternative policies
if approved in advance by TDI.
Liability Coverage
Pays: Other people's expenses for accidents caused by drivers
covered under your policy, up to your policy's dollar limits.
These may include the other person's medical and funeral costs,
lost wages, and compensation for pain and suffering car repair
or replacement costs auto rental while their car is being
repaired punitive damages awarded by a court. Liability
insurance also pays attorney fees if you are sued and bail up to
$250 if you are arrested.
Covers: You, your family members, and other people driving your
car with your permission, even if they don't have their own
liability insurance and are not named on your policy. You and
your family members also are covered when driving someone else's
automobile - including a rental car - but not a car that you
don't own but have regular access to, such as a company car.
Medical Payments Coverage
Pays: Medical and funeral bills arising from accidents,
including those in which the victim was a pedestrian or a
bicyclist.
Covers: You, your family members, and passengers in your car,
regardless of who caused the accident.
Personal Injury Protection (PIP)
Coverage
Pays: Same as medical payments coverage, plus 80 percent of lost
income and the cost of hiring a caregiver for an injured person.
Covers: You, your family members, and passengers in your car,
regardless of who caused the accident.
An insurance company must offer you $2,500 in PIP, but you can
buy more. If you don't want PIP, you must reject it in writing.
Uninsured/Underinsured Motorist (UM/UIM)
Coverage
Pays: Your expenses from an accident caused by an uninsured
motorist or if the other driver did not have enough insurance to
cover your bills, up to your policy's dollar limits. Also pays
for accidents caused by a hit-and-run driver if you reported the
accident promptly to the police.
Bodily injury UM/UIM pays without deductibles for medical bills,
lost wages, pain and suffering, disfigurement, and permanent or
partial disability.
Property damage UM/UIM pays for auto repairs, a rental car, and
damage to items carried in your car. There is an automatic $250
deductible. This means you must pay up to $250 of the repairs
yourself.
Covers: You, your family members, passengers in your car, and
others driving your car with your permission.
Insurers must offer UM/UIM coverage, but you can reject it in
writing.
Collision (Damage to Your Car) Coverage
Pays: The cost of repairing or replacing your car after an
accident, regardless of who was driving or who was at fault.
Payment is limited to your car's actual cash value, minus your
deductible. Actual cash value is the market value of a car like
yours before it was damaged.
Comprehensive (Physical Damage Other
than Collision) Coverage
Pays: The cost of replacing or repairing your car if it is
stolen or damaged by fire, vandalism, hail, or another cause
other than collision. Comprehensive coverage also pays for a
rental car or other temporary transportation if your car is
stolen. Your policy won't pay for an auto theft unless you
report it to the police. Payment is limited to your car's actual
cash value, minus your deductible.
Towing and Labor Coverage
Pays: Towing charges when your car can't be driven. Also pays
labor charges, such as changing a tire, at the place where your
car broke down.
Rental Reimbursement Coverage
Pays: A set daily amount for a rental car if your car is stolen
or is being repaired because of damage covered by your policy. |
