In this excerpt from the Texas Department of Insurance website, you will learn some basics about automobile insurance in Texas.
Automobile Insurance Made Easy
Texas law requires people who drive in Texas to pay for the accidents they cause. Most drivers do this by buying auto liability insurance.
Liability insurance pays to repair or replace the other driver's car and pays other people's medical expenses when you’re at fault in an accident.
If you buy insurance to meet the state's financial responsibility law, you must buy at least the minimum amount. The current minimum liability limits are $30,000 for each injured person, up to a total of $60,000 per accident, and $25,000 for property damage per accident. This basic coverage is called 30/60/25 coverage.
Because of car prices and the high cost of medical care, the minimum amounts might not be enough to pay all of the other driver's costs if you're in an accident. Other drivers could sue you to collect the difference. Consider buying more than the basic limits to protect yourself financially.
Liability insurance doesn't pay to repair or replace your car or to treat your injuries. Other types of coverages such as personal injury protection, uninsured or underinsured motorist, medical payments, collision, and comprehensive - can help you pay for these expenses.
Proof of Financial Responsibility
When you buy an auto policy, your insurance company will send you a proof-of-insurance card. You must show your current card when you:
- are asked for it by a police officer,
- have an accident,
- register your car or renew its registration,
- get or renew your driver's license, and
- have your car inspected.
Know Your Rights
Texas has a Consumer Bill of Rights for auto insurance. Your insurance company must send you a copy with your policy. Read it to understand your rights under Texas law.
Auto Insurance Coverages
Depending on the types of coverage you have, auto insurance pays for car repair or replacement, medical expenses, rental cars, towing, court costs, and other expenses.
Read your policy carefully because coverages vary. Pay special attention to who is covered under your policy and to the exclusions, which are the things your policy doesn't cover. The following are common limitations or exclusions you might find on your policy:
- Named driver. Some policies only cover household residents who are specifically named on the policy.
- Excluded driver. Excludes coverage for people specifically named in an endorsement that may be attached to your policy.
- Racing. Excludes coverage if you use your car in a racing event.
- Intentional acts. Excludes coverage for losses that were intentional.
The front page of your policy—called the declarations or dec page—shows the exact name of your insurance company, your policy number, and the amount of each of your coverages and deductibles.
Note: The deductible is the amount you must pay before the insurance company will pay. For example, if you have a claim for $1,000 and a deductible of $300, the insurance company will automatically deduct $300 from the amount it will pay you.
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