In order to obtain registration for your car in Harris County, you must show proof of the minimum auto insurance coverage required by Texas law. In order to obtain auto insurance, you must show a driver’s license So how is it there are so many wrecks that involve uninsured and/or unlicensed drivers in Houston?
The Loophole – Nonstandard Insurance
Most automobile insurers sell standard auto insurance. Standard auto insurance typically provides not only the minimum coverage to you, but also to anyone to whom you loan the vehicle. It also covers you if you are driving someone else’s vehicle. It is typically sold in 6-12 month terms. But there is also nonstandard insurance.
Nonstandard Auto Insurance vs Standard Auto Insurance
Nonstandard auto insurance is different from standard insurance. While much of the coverage is the same, it may contain any number of restrictions. It may exclude specific drivers. It may exclude anyone to whom you loan the vehicle. It may exclude covering you only in rental cars. Nonstandard insurance is designed as a way for insurance companies to keep rates low for high-risk drivers such as teenagers, people with bad driving histories, people with sports cars, and/or people with bad credit. It may be paid by the week or the month or any other term the seller allows it to before. Fred Loya, Mercury Insurance, and Safe Auto Insurance are examples of insurance companies that offer non-standard auto insurance.
No Requirement Regarding the Car Insurance Term
While there is a requirement that you show proof of insurance, there is no requirement as to what the term of insurance has to be. This is a major flaw in Texas law. As a result, nonstandard insurers may sell a policy to someone that is renewable week-to-week. The driver can then purchase that insurance, get the car registered and plates issued, and then cancel the insurance after a week. In fact, because of this they can sell to people with good credit, bad credit, no credit, or whomever they want and get their fee in advance for each week.
What To Do If You Are Hit By An Unlicensed or Uninsured Driver
If you are involved in a collision with an unlicensed or uninsured driver, you may not even become aware of it until you go to file a claim against the other driver’s car insurance. Sometimes that is when you first find out the license was suspended or the policy was a fake. If this is the case, your best option is usually to file a claim against uninsured motorist insurance–assuming you were proactive and purchased it on your policy.. They will often gladly assume the burden to investigate whether the other driver’s license and/or insurance really was invalid. This is because they do not have to pay if there is other coverage. If you do not have uninsured motorist coverage, you have may have little choice but to contact an attorney who handles auto accident claims to see if there are any other avenues to recoup your losses.
As Simmons and Fletcher, P.C., we handle third-party and uninsured motorist claims. Call us for a free consultation: (713) 932-0777.
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