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About Auto Insurance

A Texas auto insurance policy pays only for damages, injuries and other losses - such as theft - specifically covered by the policy. Some coverages - such as liability insurance - are required, while others are purely optional.

The following information describes Texas car insurance requirements and explains what your policy covers. It does not take the place of reading your policy. When reading your policy, pay special attention to the exclusions, which describe things your policy doesn't cover.


Frequently Asked Questions about Car Insurance:

What meets TX insurance requirements?
You must show you can pay for accidents you cause. Most Texas drivers do this by buying auto liability insurance. The law requires minimum coverage of $30,000 per injured person, up to $60,000 for everyone hurt in an accident and $25,000 for property damage. This basic coverage is called 30/60/25 for short.
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How do I prove I have insurance?
Your insurance company will send you a proof-of- insurance card listing the covered cars and drivers and showing the policy number and expiration date. Your policy or a temporary binder is also acceptable evidence of insurance.
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When must I show proof of insurance?
Proof of financial responsibility must be shown when you:
1. Are asked for it by a law enforcement officer.
2. Have an accident.
3. Register your car or renew its plates.
4. Obtain or renew a driver's license.
5. Get your car inspected.

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What are the penalties for driving without insurance?
Texas law provides severe penalties for violating financial responsibility laws:
1. First Conviction: $175 to $350 fine.
2. Subsequent Convictions: $350 to $1,000 fine, driver's license suspension and impoundment of your car.

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Do I need more than Texas' minimum liability insurance when I drive in other states?
No. Your Texas policy automatically meets the requirements of other states and Canada.
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Can I get liability insurance for nonowners if I don't have a car?
Yes. You can buy a non-owner liability policy. It pays for damages and injuries you cause when driving a borrowed or rented car but not for damage to the auto you are driving.
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Is my policy good in Mexico?
No, with a possible minor exception. Mexico does not recognize U.S. auto liability policies. You can buy Mexican liability insurance and Mexico insurance from Texas agents who specialize in it.

The minor exception: Some U.S. companies provide a free endorsement extending your policy's coverage to infrequent trips of up to 10 days and as far as 25 miles into Mexico. You can buy coverage for longer stays, but it still ends 25 miles from the border. Check your policy if you live in or frequently travel to the Texas-Mexico border area.

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Will my auto policy pay for flood damage?
Yes, if you have comprehensive, other than collision, coverage for your car.
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Does my policy cover equipment such as cellular phones?
The Personal Auto Policy won't pay for tapes, compact discs, cellular phones or citizen band radios or for stereo equipment, not permanently installed in your car, unless you pay extra for separate coverage.
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Do I have to buy collision and comprehensive coverage?
Texas law does not mandate this, but lenders usually require collision and comprehensive on cars they are financing.
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When I buy a car, does my policy automatically cover it?
Yes, but you need to be aware of certain limitations. An additional car automatically has the same coverage as the car with the broadest coverage provided by your policy. (EXAMPLE: You already have two cars. One has just liability coverage. The other has liability, collision and comprehensive - the broadest coverage afforded by the policy. Therefore, if you buy a third car, it automatically will have liability, collision and comprehensive.)

A replacement car automatically has the same coverage as the car it replaced. (EXAMPLE: You have two cars. You trade in the older car, which has only liability automobile insurance coverage, on a new car. This means the new car automatically has only liability coverage.)

Be sure to notify your company as soon as possible that you have added or replaced a car and which coverages you want for the new car. You could lose coverage on the new car if you wait longer than 30 days.

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What if I drop collision and comprehensive on my financed car?
Don't. The lender will buy single-interest automobile physical damage coverage. It is expensive and protects only the lender, who will add the premium to your note. You may drop collision and comprehensive once a car no longer is financed.
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What family members are covered by my personal auto policy?
Spouse, blood relatives, in-laws, adopted children, wards and foster children living in your home - even if not named on the policy. Also covered are family members attending school away from home.
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Do I need to buy special coverage when renting a car in Texas?
Auto rental agencies offer collision damage waivers that pay if you damage a rental car. You might not need this extra expense because your auto liability policy already covers such damage. Remember, however, that your liability policy only pays up to its dollar limit. This might be less than the value of a rental car. If you rent cars often, it is cheaper to raise your liability limit than to buy collision damage waivers.
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What do the coverages listed on my policy actually do?
The Texas Personal Automobile Policy offers eight common types of coverage. You select and pay for each coverage you want. They are:
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Liability...
Pays: Other people's expenses for accidents caused by drivers covered under your policy. This is the only auto insurance required by Texas law.

The insurance company will pay amounts for which you are legally responsible, up to your policy's dollar limits. These may include the other party's:
1. Medical and funeral costs, lost wages and compensation for pain and suffering.
2. Car repair or replacement costs and auto rental.
3. Punitive damages awarded by a court.

Liability also pays attorney fees, if you are sued, and bail, up to $250, if you are arrested.

Covers: You, your family members and anybody else driving with your permission, even if they don't have their own liability insurance.

You and your family members also are covered when driving other people's automobiles - including rental cars - but NOT cars regularly available to you such as a company car.

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Medical Payments...
Pays: Medical and/or funeral bills arising from motor vehicle accidents, including those in which the victim was a pedestrian or a bicyclist.

Covers: You, your family members and passengers in your car, regardless of who caused the accident. You can't collect from both your medical payments and your uninsured motorist/underinsured motorist coverages for the same medical bills.

NOTE -- If your policy includes Medical Payments or PIP, your insurer is required to pay a supplemental death benefit of up to $10,000 to survivors of any covered person killed in a car accident while buckled up or protected by an airbag. To collect, a beneficiary must provide proof of death and a police report or other evidence that the victim was protected by an airbag or seatbelt.

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Personal Injury Protection (PIP)...
Pays: Same as Medical Payments, plus:
1. 80 percent of lost income.
2. The cost of hiring someone to take on the household and caregiver responsibilities of an injured person.

Covers: Same people as Medical Payments. A company must offer you $2,500 in PIP, but you can buy more. If you don't want PIP, you must reject it in writing.

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Uninsured/Underinsured Motorist...(UM/UIM)
Pays: Your losses from an accident caused by a hit-and- run driver or an uninsured motorist, up to your policy's dollar limits. Also pays if the other driver did not have enough insurance to cover all your expenses.
1. Bodily injury UM/UIM pays without deductibles for medical bills, lost wages, pain and suffering, disfigurement and permanent or partial disability.
2. Property damage UM/UIM pays for auto repairs, a rental car and damage to items carried in your car. There is an automatic $250 "deductible" - an amount you pay from your own pocket.

NOTE -- Your UM/UIM insurance pays for a hit-and-run accident only if you promptly report it to the police.

Covers: You, your family members, passengers in your car and anybody driving with your permission.

Insurers must offer UM/UIM coverage, but you can reject it in writing.

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Collision (Damage to Your Car)...
Pays: Cost of fixing or replacing your car after an accident - regardless of who was driving or who was to blame. Payment is limited to your car's actual cash value, minus your deductible. "Actual cash value" is the retail price of a car like yours before it was damaged. You should consider dropping this coverage if you have an older car that is paid for.
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Comprehensive (Physical Damage Other than Collision)...
Pays: To replace or fix your car if it is stolen or if it is damaged by causes other than a collision, such as fire, vandalism or hail. Also pays for a rent car or other temporary transportation if your car is stolen.

Coverage Limit: Your car's actual cash value, minus your deductible.

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Towing & Labor...
Pays: Towing charges when your car is disabled. Also pays labor charges, such as changing a tire, at the place where your car is disabled.
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Rental Reimbursement...
Pays: A set daily amount for a rental car if your car is stolen or is being fixed because of damage covered by your auto policy.

CAUTION -- Your policy won't pay for auto theft unless you report it to the police.
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If you have any questions that have not been answered by this site, please contact us anytime and we'd be happy to discuss your insurance needs in more detail!
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