Understanding Texas Full Coverage Insurance Requirements: What You Need to Know

Texas law requires that all drivers have adequate auto insurance. According to state law in Texas, drivers must have minimum insurance coverage of up to $60,000 per accident and $30,000 per injured party.

Texas drivers must also have property damage coverage of at least $25,000. These Texas Full Coverage Insurance requirements are often referred to as 30/60/25 by insurance and legal professionals.

The minimum requirements are insufficient to cover all costs associated with recovery and repair if you were injured in an accident.

Texas does not require drivers to carry insurance against underinsured or uninsured drivers. However, it is a good idea to include it in your policy. This insurance covers you if a driver injures you without insurance or with inadequate coverage.

What is Texas Full Coverage Insurance in Texas?

Full coverage is the term used to describe car insurance you must buy when financing a vehicle. Lenders are concerned that their investment will be protected if it’s damaged or wrecked before the vehicle is paid for.

They want you to have collision and comprehensive insurance. They are usually optional, except when you finance the vehicle. Then they become mandatory.

The state always requires liability insurance, the third component of a full coverage package.

Full coverage insurance for Texas drivers typically includes:

• The state of Texas requires minimum auto insurance. This includes both bodily injury and property damage coverage.

• Comprehensive coverage and collision insurance

Texas auto insurance policies include two additional types of coverage.

• Uninsured/underinsured motorist coverage (UM/UIM)

• Personal Injury Protection (PIP),

Consumers can waive these two last forms of insurance in writing, but there are good reasons to keep both if they want what could be considered complete protection.

These reasons will be explained further down. We’ll also look at some optional car insurance that drivers may wish to add.

Explore each of the components that comprise Texas Full Coverage Insurance.

Minimum Liability Insurance Required by State in Texas

All Texas drivers are required to have liability insurance.

• Liability for bodily injury up to $30,000 per person

• Liability for bodily injury up to $60,000 per accident

• Property Damage Liability of $25,000

Other drivers or passengers may file a claim against your liability insurance provider if you are at fault for the accident.

The bodily injury liability insurance covers funeral costs and medical bills. In contrast, the property damage liability coverage covers repairs or replacements of other cars, fences or property you damaged in an incident.

Liability insurance is a legal requirement in Texas and will always be included as part of your insurance coverage.

It would be best to consider increasing your liability limits to ensure you are better protected in Texas. If someone’s vehicle is totalled, the required liability of $25,000 for property damage will only go so far.

If you are responsible for a car accident, the required $25,000 in property damage liability isn’t going far if someone’s vehicle is totalled. You will have to pay for any remaining money or risk being sued.

Types of Insurance Coverage In Texas

It is important to know that while the minimum insurance requirements are straightforward, having more coverage provides greater protection in an accident.

Your insurance company, or the insurer of the driver at fault in the event of an accident that you did not cause, may cover medical costs, car repairs, court fees, and other expenses, depending on the amount and type of insurance.

Understanding the types of insurance coverage will help you choose the right insurance and navigate the insurance system if you have an accident.

• Liability Coverage is the only coverage required by law in Texas. It covers medical costs, funeral expenses and lost wages for serious injuries. This insurance covers damage to property, such as replacing or repairing a damaged car or paying for rental cars while repairs are being made.

• Collision Coverage is something that a lender requires when you are financing the purchase of a car. This insurance covers damages to your vehicle while you are still in debt. This insurance pays out the actual value of your car, the cost to repair or replace the vehicle or the amount listed on the declaration page.

• Comprehensive coverage is similar to collision insurance but covers costs for repairing or replacing a car damaged in an incident other than a crash. For example, if it’s stolen, vandalized, or damaged by hail or any other non-collision event.

• Uninsured/Underinsured Motorist coverage – will pay out damages for bodily injury and property damage if you’re in an accident caused by a driver who doesn’t have insurance. Texas requires drivers to have insurance. However, many still need to. That can provide an extra layer of protection.

Bodily injury liability insurance

If you are responsible for a car crash in which another person is injured, bodily injury coverage help pay their medical bills and lost income.

If you are taken to court for an accident, this coverage can also pay your legal fees. In most states, you are required to carry bodily injury liability insurance on your auto insurance policy.

Medical expenses

Suppose you are at fault for a car crash. In that case, bodily injury liability insurance will pay for the hospital and emergency care of others.

This insurance may cover the cost of their follow-up doctors’ visits and other costs associated with them, such as buying crutches or wheelchairs.

Compensation for loss of income and wages

As part of their recovery, if they have hit another vehicle and that driver has been injured, they may be required to undergo months of physical therapy.

The person injured in an accident may lose income or wages if he cannot work or perform his normal job functions.

In this situation, your auto insurance policy’s bodily injury liability coverage could help pay for compensation. The laws of your state may limit the compensation an injured person can get for their lost income.

Legal Fees

You could be sued by the injured person or their insurance company after an accident that resulted in injury. You may need to hire a lawyer, which is expensive. Your bodily injury liability insurance may cover your legal fees.

Liability insurance for bodily injury pays the above costs if you are found to be at fault in an accident. It could be a pedestrian, a driver in another vehicle or if you have unrelated passengers.

This coverage will not cover your medical bills or income loss if you are the one who caused the accident. It may pay your legal fees if you are taken to court for an accident you caused.

Per-person limit

Each person injured in an accident will be subject to the per-person limitation. Say, for example, that your limit per person is $50,000. Suppose one person is injured by a car. In that case, your bodily liability will pay a maximum of $50,000 for their medical bills.

Per-accident limit

Each accident that results in multiple injuries is subject to the per-accident cap. Let’s say your limit per accident is $100,000.

Suppose you are responsible for a car crash that causes injuries to three people. In that case, your bodily injury liability will only cover their combined expenses of up to $100,000.

Collision insurance

Collision Insurance helps pay for repairs or replacements of your vehicle, whether a tree or another vehicle. Lenders usually require collision coverage if you are leasing or financing your vehicle. When your car has been paid off, collision coverage is an option to add to your auto insurance.

What does collision insurance cover?

Collision insurance will pay for the repair costs if your car is totalled or damaged in an incident.

• Accidental collision of a car with another vehicle.

• A car crash with an object such as a pole, fence or guardrail.

• A car hits your vehicle in a hit-and-run situation.

• The car is rolled over.

What collision insurance doesn’t cover

The collision insurance policy does not cover the following:

• Car damage to another’s vehicle

• Injuries

• Weather-related damage to your vehicle, such as hail or flood damage

• Car theft

• You may need to repair an object that you have crashed into, like a fence or pole

Comprehensive insurance will cover your vehicle for damage caused by car theft, flooding, fire, hail, falling objects, such as a branch, and collisions with other animals.

The comprehensive insurance is sold along with the collision insurance. It is required by most car loans and leases.

Does comprehensive auto insurance cover this?

What is the Collision Insurance Deductible?

The car insurer deductible applies to claims for collision insurance. Insurance deductibles are the amounts that are deducted from a claim check.

If you have a $500 insurance deductible and need to repair your car after an accident, you’ll get a check for $2,500. ($3,000 minus $500 = $2,500).

You can choose the amount of your deductible when you purchase collision insurance. Deductibles can be anywhere from $100 up to $1,000, but the most common amount is $500.

You’ll pay less for car insurance if you select a higher deductible. This is because your insurer pays less if you claim collision insurance.

What is the cost of collision insurance?

According to the National Association of Insurance Commissioners (NAIC), the average cost of collision insurance in the United States is $381 per year. Below is the average for your state.

Conclusion:

Anyone who intends to drive in Texas must understand the Texas Full Coverage Insurance requirements. The right insurance will protect you against financial problems if you ever get into an accident. It also ensures you follow the law. The simple steps will help you to stay safe while driving in Texas and keep your finances safe.