Automobile insurance is required in all 50 states. Car insurance is proof that a driver is financially capable of paying for a crash victim’s medical bills and property repairs. Making minimum amounts of car insurance mandatory for all drivers is a way to protect citizens from having to pay out of pocket for damage that they didn't cause. Learn Texas’s car insurance laws to make sure you have enough coverage.
Type of Insurance Coverage in Texas
Texas offers various insurance options tailored to different needs:
Liability Coverage
Liability insurance, which is required by law, covers damages and injuries you cause to others. It generally includes bodily injury liability and property damage liability. But it doesn’t pay for your injuries or for damage to your vehicle. Liability coverage is the foundation of Texas auto insurance laws, requiring responsible drivers to pay for the damage and injuries caused by an accident.
Collision Coverage
Collision coverage covers damage to your car after an accident, regardless of who is at fault. Recently in Dallas, where these types of accidents are highly likely due to heavy traffic, this kind of coverage is very beneficial.
Comprehensive Coverage
Comprehensive insurance protects against non-collision damages, including theft, vandalism, or natural disasters. With unpredictable weather in Texas, comprehensive coverage can save you money from events like hailstorms and floods.
Uninsured/Underinsured Motorist Coverage (UM/UIM)
Uninsured/underinsured motorist coverage comes into play when the other driver does not have enough auto insurance coverage or any auto insurance coverage at all. Fact 3: Many drivers have limited or no insurance, and if you are in the higher risk areas like Dallas, then having UM/UIM Coverage is exceptionally important.
Medical Payments (MedPay) or Personal Injury Protection (PIP)
Medical Payments or Personal Injury Protection – Covers medical expenses incurred by you and your passengers. According to the Office of Public Insurance Counsel, PIP in Texas covers at least $2,500 per individual for medical and other expenses, as well as 80% of lost wages and essential services. MedPay is similar — it pays medical expenses, but it doesn’t also cover lost wages or other non-medical expenses.
Other Insurance Options
Beyond basic policies, Texans should consider alternative insurance solutions:
Gap Insurance
Gap insurance pays the difference between what your car’s worth and what you owe on a loan or lease if the car is totaled. GAP insurance can help drivers prevent financial hardship following a total loss if they are financing a new vehicle in Dallas.
Rental Reimbursement Coverage
Rental reimbursement coverage covers the cost of a rental car when your car is being repaired after an accident. This makes it a great option for those who live in sprawling cities such as Dallas and do not have great public transport infrastructure.
Roadside Assistance Plans
Towing, battery jumps, and fuel delivery are examples of services offered by roadside assistance plans. Considering Texas has one of the largest road networks, roadside assistance is an invaluable service in the event of a breakdown, particularly in and around highways in Dallas.
Pay-Per-Mile Insurance
Usage-based car insurance is great for low-mileage drivers. For Dallas residents and employees who depend on public transportation or work remotely, this plan can save money and still serve the needed coverage.
They are tailored to different situations, giving the policyholder greater flexibility. A trusted insurance advisor can help make certain you’re properly protected.
Minimum Required Amounts of Insurance in Texas
If you register a vehicle in Texas that you plan on driving, you legally must purchase at least the minimum required amounts of insurance under state law. The required types and amounts of insurance vary from state to state. If you have moved to Texas from a different state, you must update your address and coverage to match the required amounts. As of 2021, Texas’s minimum liability coverage is 30/60/25, meaning the following amounts of insurance are required:
- Bodily injury liability per person: $30,000
- Bodily injury liability per accident: $60,000
- Property damage liability per accident: $25,000
You may also opt to pay for greater coverage limits, as well as optional types of coverage. The minimum amounts of insurance in Texas only pay for the other driver's losses, not yours. For first-party coverage, you could purchase uninsured or underinsured motorists, medical payment, rental car reimbursement, and/or personal injury protection insurance.
Do I Need Proof of Insurance?
Yes, Texas law mandates that drivers must always carry proof of insurance. This proof could be in physical or electronic form, such as through a smartphone app. This must be provided when asked for by law enforcement, when registering a vehicle, or in the aftermath of an accident. Not showing proof may result in fines and other penalties.
Many insurance providers also provide digital cards in an app, so it's easier than ever to access your proof of coverage when you need it. Having multiple proofs, in digital and physical form, can help avoid potential fines in case something technical goes wrong.
How Does Liability Insurance Work?
Texas is a fault state, not a no-fault state. It requires all drivers to have liability insurance to pay for other drivers’ bills and losses. After a car accident in Texas, an injured victim will file a claim with the insurance provider of the at-fault driver. As long as the driver has the required amount of insurance, his or her insurer will pay for the victim’s losses, up to the policy’s maximum. No-fault states, on the other hand, require personal injury protection (PIP) insurance to pay for a policyholder’s own medical bills, regardless of fault for the crash.
Penalties for Driving Without Insurance/Proof of Insurance
If you break the law by driving without the required amounts of insurance in Texas, you could face multiple penalties. These penalties can be severe, depending on the circumstances. The State of Texas takes car insurance requirements seriously, as insurance can decide whether or not a crash victim will recover compensation for his or her losses. The penalties for driving without insurance may include:
- A fine of $175 to $350 for a first offense, or up to $1,000 for a second or subsequent offense
- Mandatory SR-22 certificate (higher-cost car insurance).
- Suspension of your vehicle’s registration.
- Impoundment of your vehicle.
It is also a requirement to carry proof of insurance. This can take the form of an insurance card in your vehicle or wallet, or a digital version on your smartphone. If you are unable to show proof of insurance during a traffic stop, you will receive a ticket and have to pay a fine. Recently, Texas ended its Driver Responsibility Program, which imposed an additional $250 fine per year for three years after being caught driving without insurance. Even after the end of this program, however, the potential penalties are significant.
Is Texas an At-Fault State?
Yes, Texas is an at-fault state, meaning the driver at fault for causing an accident is held liable for damages from the accident. This system holds the at-fault driver’s insurance financially responsible for medical expenses, property damage, and other losses.
In practical terms, this means that if you are involved in a car wreck in Dallas, the injured party may file a claim with your insurance company or sue you directly for damages. Drivers who are at fault must prove their fault through police reports, witness statements and other documentation. And, as proving who is at fault can be a complicated endeavor, having sufficient insurance coverage — potential legal expenses included — is crucial.
If you're a Dallas driver, it's crucial for you to know what at-fault laws mean for you. In crowded urban areas, like Dallas, there is an increased chance of multi-car collisions, referring to collisions that include multiple vehicles which can complicate determining liability when facing an auto accident. Collision and comprehensive coverage can protect you from these extra costs.
Additionally, modified comparative fault is applied in Texas, so if you had some measure of fault for an accident, your compensation may be reduced. For example, if you are 20% at fault, you will only be able to recover 80% of your damages. If you are over 50% at fault, you cannot recover damages at all. This law highlights the necessity of sufficient insurance coverage in order to protect yourself against potential financial ruin.
What Happens if You Get Into an Accident With an Uninsured Driver?
Unfortunately, many drivers in Texas are guilty of driving without the required amounts of car insurance. If you get into a crash with one of these drivers, contact an attorney right away. It can be more difficult to obtain the financial compensation that you deserve in this scenario. You may be able to file a claim with your own insurance provider if you have more than the minimum required amounts of car insurance in Texas. Another option could be a personal injury lawsuit against the driver or another party, depending on the circumstances. Contact an attorney today to review your case and list your legal options.