What is Covered By a Texas Liability Auto Insurance Policy?

The Standard Texas Liability Auto Insurance Policy

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Buying automobile insurance in Texas can be a confusing experience. If you are not careful, you can wind up paying a lot of money for the wrong kind of coverage. This article is designed to help consumers understand the various types of coverage made available under a standard Texas liability auto insurance policy.

What are the Required Minimum Limits of Texas Auto Insurance?

In Texas, all drivers are required by law to carry the minimum limits of liability coverage. Those are liability insurance limits of 30,000 per person up to 60,000 total per accident in a standard Texas liability auto insurance policy. Additionally, drivers are required to carry a minimum of 25,000 in property damage coverage. In addition to higher limits, optional coverage includes uninsured/underinsured motorist coverage, personal injury protection coverage, and medpay coverage. But drivers are not required to carry any of the optional coverages under Texas Law.

What is Liability Insurance?

Liability insurance is third-party insurance coverage that applies to someone else when you cause an accident through your own negligence and they sustain injuries. Your insurance company has agreed to accept responsibility for a certain amount of damages (the limits) you are judged to have legally caused to another by your negligence. In a minimum limits policy, this amount is damages up to 30,000.00 for one injured person.

How Does a 30,000/60,000 Limit Insurance Policy Work?

The first number is a per-person cap on pay-out, the second number is a per accident cap. Thus, if you have a minimum limits policy of 30,000.00/60,000.00 and you hit a car with three people in it who each have 35,000 in damages, your insurance policy is only liable to pay a total of 60,000.00 with no more than 30,000.00 going to any single person. The remaining 45,000.00 in damages would be your responsibility.

If someone is injured in an automobile accident, 30,000.00 is not always enough to pay their medical bills. It is a good idea to carry more than just the minimum required limits on both personal injury liability and property damage liability. Individual policies typically issue all the way up to 250,000.00/500,000.00 where commercial policies go much higher.

What is Uninsured/Underinsured Motorist Coverage?

Uninsured Motorist Coverage protects you when someone else negligently causes an accident with you but has no insurance coverage of their own. This type of coverage basically provides coverage up to the limits of the policy for any damages you suffer due to the uninsured driver’s negligence. It does not typically cover self-insured entitles such as a municipality or other government agency.

Underinsured Motorist Coverage protects you when someone else negligently causes an accident but does not have enough coverage to cover all of your damages. it then pays the damages over and above the other driver’s limits up to the cap.

Uninsured Motorist Coverage and Underinsured Motorist Coverage (UM/UIM) are typically sold as a package. They are similar in that they both provide coverage for the consumer who purchases the policy in the event of an accident, but they address two different situations.

For more information on the difference between the two, please visit the uninsured/underinsured motorist page.

What is Personal Injury Protection (PIP) Coverage?

Personal injury protection coverage, or PIP insurance, is no-fault insurance that protects you and the occupants of your vehicles when you are involved in an automobile collision. It is typically available in increments of $2,500.00 of coverage in a standard Texas liability auto insurance policy.

For information on non-standard auto insurance, you may wish to read: How do so many unlicensed, unregistered drivers get the cars registered in Houston?