Every Texas Driver Should Know:
laws regarding driving in Texas require Texas drivers 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 doesn´t 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 coverages
has an automobile insurance Consumer Bill of Rights. Your
company must send you a copy with your policy or policy renewal.
Take time to read it to fully understand your rights under
Requires Proof of Financial Responsibility!
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
asked for it by a law enforcement officer
have an accident
your car or renew its registration
or renew your driver´s license
your car inspected.
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 Coverages
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.
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.
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.
qualifies as a family member?
auto policy covers your spouse, blood relatives, in-laws,
adopted children, wards, and foster children living in your
home, even if not named on the policy. Family members attending
school away from home and a spouse living elsewhere during
a marital separation also are covered.
Medical Payments Coverage
Pays: Medical and funeral bills arising from
accidents, including those in which the victim was a pedestrian
or a bicyclist.
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.
You, your family members, and passengers in your car, regardless
of who caused the accident.
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.
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
Covers: You, your family members, passengers
in your car, and others driving your car with your permission.
must offer UM/UIM coverage, but you can reject it
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
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.
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.
for Stereo Equipment
policy won´t pay for tapes, compact discs, cellular
phones, citizen band radios, or stereo equipment not permanently
installed in your car. However, you can buy endorsements to
your policy that provide separate coverage for these items
for an additional premium.
Coverage When Renting a Car
rental agencies offer collision damage waivers as well as
liability policies. The collision damage waiver is not insurance.
It is an agreement that the rental company will waive its
right to recover the costs of the damage to the auto from
the renter with certain exceptions, regardless of who is at
fault. If you have an auto liability policy, your policy already
covers damage to a rental car. Your coverage limit, however,
might be less than the value of a rental car. If you rent
cars often, it might cost less to raise the liability limit
on your auto policy rather than buying collision damage waivers
each time you rent. The Texas Automobile Rental Liability
Policy provides liability insurance for renters who do not
have a personal auto policy.
you don´t own a car, but borrow or rent cars often,
you can buy a non-owner liability policy. A non-owner policy
pays for damages and injuries you cause when driving a borrowed
or rented car but not for damage to the auto you are driving.
When Driving in Other States, Canada, and Mexico
Texas policy automatically meets the financial responsibility
requirements of other U.S. states and Canada. Mexico, however,
does not recognize U.S. auto liability policies.
does not require drivers to have automobile liability insurance.
However, drivers can be held criminally and financially responsible
for any auto accidents they cause. If you´re in an accident
that results in an injury, police in Mexico may detain you
until they determine who is at fault. You will have to show
that you either have insurance recognized by the Mexican government
or the financial ability to pay any judgment against you.
can buy Mexican liability insurance from Texas agents who
specialize in it. Some U.S. companies provide a free endorsement
extending your policy´s coverage to infrequent trips
of up to 10 days and as far as 25 miles into Mexico. You can
buy coverage for longer stays, but it is valid only within
25 miles of the border. Telephone books in border towns list
insurance agents that specialize in car insurance for travel
in Mexico. Your local agent also might be able to help you
find coverage with a Texas-licensed Mexican company.
also may be able to buy a limited Mexico "tourist"
endorsement that extends your Texas liability coverage to
pay expenses exceeding those covered by a Mexican liability
policy. This endorsement covers trips of any distance and
any length of time. Ask your agent which endorsements your
insurance company offers.
of New or Additional Automobiles
you buy a new or additional car, your policy will automatically
cover it, but there are certain limitations you should be
additional car automatically has the same coverage as the
car with the broadest coverage provided by your policy. For
example, if you have two cars - one with liability coverage
only and one with liability, collision, and comprehensive
- and you buy a third car, the third car will automatically
have liability, collision, and comprehensive coverage.
replacement car automatically has the same coverage as the
car it replaced. For example, if you trade in an older car
that only had liability coverage, the new car will automatically
have only liability coverage.
sure to notify your insurance company as soon as possible
that you have added or replaced a car and which coverages
you want. You could lose coverage on the new car if you wait
longer than 30 days.
TDI´s Consumer Help Line or by visiting the TDI website
463-6515 in Austin