A Comprehensive Guide To Car Insurance In Texas

If you’re planning on driving in Texas, understanding car insurance is imperative. With my 15 years of experience in insurance and being a Texas resident, I’ll help you navigate the state’s unique requirements, understand potential penalties, and find affordable coverage that protects you and your vehicle on the road.

Minimum Car Insurance Requirements In Texas

The minimum car insurance requirements in Texas are designed to ensure that drivers can cover costs for any injuries or damages they might cause in an accident. Known as 30/60/25 coverage, these minimum liability requirements are as follows:

1. $30,000 Bodily Injury Liability per Person:
   This amount covers up to $30,000 for each injured person in an accident you cause. It’s meant to help pay for medical expenses, lost wages, and other related costs for the injured party.
2. $60,000 Bodily Injury Liability per Accident:
   This is the total amount your insurance will pay for injuries if more than one person is hurt in an accident you cause. The $60,000 cap applies regardless of the number of people injured, so if their combined medical expenses exceed this amount, you may be personally responsible for the difference.
3. $25,000 Property Damage Liability per Accident:
   This coverage is for any damage you cause to another person’s property, such as their car, fence, or other personal property. The insurance will cover up to $25,000 in damages for a single accident.

These are only the state minimum requirements. Many drivers opt for higher coverage limits or additional types of insurance, like uninsured/underinsured motorist coverage, comprehensive, or collision coverage, to provide more comprehensive protection.

How Much Coverage Should I Have In Texas?

In Texas, the state-mandated minimum requirements may not provide enough protection in case of a serious accident, so many drivers choose to increase their coverage limits or add additional types of coverage.

Here’s a breakdown of different types of auto insurance coverage options available to help you decide what’s best for you.

1. Liability Coverage

• Bodily Injury Liability: Covers medical expenses, lost wages, and other costs if you’re at fault in an accident that injures another person.
• Property Damage Liability: Pays for damages to another person’s property, such as their vehicle, fence, or other personal property, if you’re at fault in an accident.

Recommended Coverage Amounts: Consider increasing the bodily injury liability limit to $100,000 per person and $300,000 per accident, and property damage liability to $50,000 or more, depending on your financial situation and assets.

2. Uninsured/Underinsured Motorist Coverage

• Uninsured Motorist (UM): Covers your medical bills and property damage if an uninsured driver hits you.
• Underinsured Motorist (UIM): Provides additional coverage if the at-fault driver’s insurance is insufficient to cover your damages.

Why it’s Important: With approximately 20% of Texas drivers uninsured, UM/UIM coverage can be crucial. Many insurance experts recommend matching your UM/UIM coverage to your liability limits for added protection.

3. Personal Injury Protection (PIP)

• Covers medical expenses, lost wages, and other related expenses for you and your passengers, regardless of who is at fault. Car insurance companies in Texas are required to offer at least $2,500 in PIP, but you can opt for higher amounts.

Recommended Coverage Amounts: Texas allows you to purchase additional PIP coverage beyond the minimum, with amounts typically available up to $10,000. This can be especially useful if you have a high deductible health plan or limited health insurance coverage.

4. Comprehensive Coverage

• Covers damage to your car caused by events other than a collision, such as theft, vandalism, fire, or weather-related incidents (hail, flooding, etc.).

Recommended Coverage Amounts: Comprehensive coverage is optional but is recommended if your car is relatively new or has a high value. You’ll typically choose a deductible, such as $500 or $1,000, based on how much you’re willing to pay out of pocket in case of a claim.

5. Collision Coverage

• Pays for repairs to your vehicle if you’re involved in an accident, regardless of who is at fault.

Recommended Coverage Amounts: Like comprehensive coverage, collision coverage is optional. If you have a newer car or a loan on your vehicle, this coverage is highly recommended. Choose a deductible amount that suits your budget.

Read More: What’s The Difference Between Comprehensive Vs. Collision Insurance?

6. Medical Payments Coverage (MedPay)

• Covers medical expenses for you and your passengers, regardless of fault. Unlike PIP, MedPay does not cover lost wages or other non-medical expenses.

Why it’s Important: MedPay can supplement your health insurance by covering out-of-pocket costs, such as copays and deductibles, but it’s typically limited to $1,000 to $5,000 in coverage. Consider MedPay if you want additional protection without the extra cost of PIP.

7. Gap Insurance

• Covers the difference between the amount you owe on a financed or leased vehicle and its actual cash value in the event it’s totaled or stolen.

Recommended Coverage Situations: If you’re financing or leasing a new car, gap insurance can prevent you from owing money on a car you no longer have.

8. Roadside Assistance Coverage

• Provides services like towing, jump-starts, fuel delivery, and tire changes if your vehicle breaks down.

Why it’s Useful: Roadside assistance can be a convenient add-on for peace of mind, especially for drivers who frequently travel long distances or drive older vehicles.

9. Rental Reimbursement Coverage

• Pays for a rental car while your vehicle is being repaired after a covered accident.

When to Consider It: This coverage can be handy if you rely on your car daily and wouldn’t want the added expense of renting a car out-of-pocket after an accident.

Average Auto Insurance Rates In Texas

The average cost of auto insurance in Texas can vary depending on several factors, including your age, driving record, location, and the type of coverage you choose. Generally, Texas has higher-than-average auto insurance rates due to factors like high accident rates, severe weather events, and a higher percentage of uninsured drivers.

As of the latest data, the average annual cost for full coverage in Texas is around $1,800 to $2,000, while the average annual cost for minimum liability coverage is approximately $600 to $700.

• Full Coverage: $1,800 – $2,000 per year (about $150 – $167 per month)
• Minimum Liability: $600 – $700 per year (about $50 – $58 per month)

Nationally, the average cost for full coverage is about $1,500 per year and $600 for minimum liability. Here’s how Texas compares:

• Full Coverage: Texas is approximately $300 – $500 higher than the national average.
• Minimum Liability: Liability insurance in Texas aligns fairly closely with the national average, though it can still be slightly higher depending on the city or region.

Different Car Insurance Needs in Texas

In Texas, drivers have unique car insurance needs based on their specific situations, from short-term coverage to specialized policies for high-risk drivers. Whether you’re driving someone else’s car, need coverage after a license suspension, or want protection against financial gaps on a financed vehicle, Texas offers various options to meet these needs.

Below are some specialized types of car insurance to consider, depending on your circumstances.

Temporary Car Insurance in Texas

Temporary car insurance provides short-term coverage, usually lasting from a few days to a few months, for drivers who need insurance for a limited time. This type of insurance is useful for individuals borrowing a car, renting a vehicle for an extended period, or covering a gap when switching policies.

While traditional insurers may not offer temporary policies, some companies provide alternatives such as short-term rental coverage or monthly car insurance.

Non-Owner Car Insurance in Texas

Non-owner car insurance is a policy designed for individuals who drive but don’t own a vehicle. This coverage provides liability protection, which pays for bodily injury and property damage if you cause an accident while driving someone else’s car.

It’s ideal for those who frequently borrow or rent cars and need to fulfill state insurance requirements or maintain coverage to avoid a lapse.

SR-22 Car Insurance in Texas

An SR-22 is not an insurance policy but a certificate of financial responsibility required by the state for high-risk drivers. In Texas, you may need an SR-22 if you’ve had a DUI, multiple traffic violations, or a suspended license.

The SR-22 confirms that you carry at least the minimum liability coverage required by the state, helping you reinstate or maintain your driving privileges.

Low-Income Car Insurance in Texas

While Texas doesn’t offer specific low-income car insurance programs, low-income drivers in Texas can find affordable coverage by shopping around, looking for discounts, and selecting a higher deductible to lower premiums.

Many insurance companies offer discounts for safe driving, bundling policies, and paying in full. Some non-profits also provide resources to help low-income individuals find lower-cost car insurance options.

Gap Insurance in Texas

Gap insurance covers the difference between the amount you owe on a financed or leased vehicle and its actual cash value if it’s totaled or stolen. This is particularly useful in Texas, where vehicles may be at risk of damage from severe weather or accidents.

Gap insurance is often recommended for new or financed vehicles, as it can prevent you from owing money on a car you no longer own.

Texas Driving Laws

Driving in Texas means following a set of state-specific laws to ensure safety and compliance on the road. Understanding these laws is essential not only to avoid penalties but also to stay informed about how the state regulates driving for various groups, from teenagers to senior citizens.

Below, we’ll look at important driving laws in Texas, covering topics such as DUIs, speeding, insurance requirements, and more.

DUIs

Texas has strict laws against driving under the influence (DUI) of alcohol or drugs. The legal blood alcohol concentration (BAC) limit for drivers over 21 is 0.08%. Penalties for a DUI can include fines, license suspension, community service, and even jail time, with harsher penalties for repeat offenses or higher BAC levels.

Uninsured Motorists

Texas requires all drivers to carry minimum liability insurance, but about 20% of drivers in the state are uninsured. If you’re involved in an accident with an uninsured motorist, uninsured motorist (UM) coverage can help pay for damages and medical bills. The law allows you to sue the uninsured driver for damages, but UM coverage can provide faster compensation.

Speeding Tickets

Speeding laws in Texas vary by area, with maximum speed limits set by the Texas Department of Transportation. Exceeding these limits can lead to fines, points on your driving record, and increased insurance rates. Texas uses a points-based system, where accumulating too many points can result in surcharges or license suspension.

Fault System

Texas operates under a “fault” system for car accidents, meaning the driver responsible for an accident is liable for damages. If you’re at fault, your liability insurance will cover the costs of property damage and medical expenses up to your policy limits. This system makes it crucial to carry adequate liability insurance, as you may be sued for any remaining costs not covered by your policy.

Teen Driver Laws

Texas has a graduated driver licensing (GDL) program for teen drivers, which involves multiple stages: learner’s permit, provisional license, and full license. Teens under 18 face driving restrictions, such as limits on nighttime driving and passenger rules. These laws are designed to gradually introduce young drivers to the road with lower risk.

Senior Laws

While Texas doesn’t have specific driving restrictions based on age, drivers aged 85 and older must renew their licenses every two years, and they may be required to pass a vision test. Additionally, family members or healthcare providers can request a driving test for seniors if there are concerns about their driving abilities.

Non-Renewal

An insurance company in Texas can choose not to renew your auto policy based on your driving record, including accidents, claims, or major violations. However, they must provide written notice of non-renewal at least 30 days before the policy ends, giving you time to seek alternative coverage.

Car Inspections

Texas requires an annual safety inspection for all registered vehicles. This inspection checks for basic safety features like brakes, lights, and tires. Some counties in Texas also require an emissions test to control pollution levels, particularly in urban areas like Houston and Dallas.

Defensive Driving

In Texas, completing a state-approved defensive driving course can remove points from your driving record and help reduce insurance costs. Additionally, courts may allow drivers to take defensive driving to dismiss a minor traffic ticket. Approved courses cover topics such as road safety, state laws, and accident prevention techniques.

State Car Registration Info

All vehicles in Texas must be registered with the Texas Department of Motor Vehicles (TxDMV). Registration requires proof of insurance, a valid safety inspection, and payment of the appropriate registration fees. New residents have 30 days to register their vehicles after establishing residency in the state.

Insurance Claims

Texas law allows you to file a claim with your own insurance company or the at-fault driver’s insurer after an accident. Insurers must process claims promptly, and Texas law requires them to settle or deny claims within a specified time frame. If a claim is denied or disputed, you have the right to appeal or seek assistance from the Texas Department of Insurance.

Proof of Car Insurance in Texas

In Texas, drivers must carry proof of insurance in their vehicle at all times. This proof, usually an insurance card, should show that you meet the state’s minimum liability coverage requirements.

If you’re stopped by law enforcement or involved in an accident and cannot provide proof of insurance, you may face fines ranging from $175 to $350 for a first offense. Repeat offenses can lead to higher fines, license suspension, and vehicle impoundment.

Texas Car-Related Crime

Texas ranks high for car-related crimes, including theft and insurance fraud. According to recent statistics, Texas is among the top states for car thefts, with over 70,000 vehicles stolen each year. Additionally, the state sees significant cases of staged accidents, where fraudsters cause collisions to claim insurance money.

Texas also has one of the highest rates of road fatalities, often attributed to speeding, driving under the influence, and distracted driving. These issues contribute to higher insurance rates across the state.

State Registration Information

To register a vehicle in Texas, you need proof of ownership (such as the title), proof of insurance, and a valid vehicle inspection. Start by visiting your local County Tax Assessor-Collector’s office with these documents and pay the registration fee. New residents have 30 days to register their vehicle after establishing residency.

To obtain a copy of your car title, complete Form VTR-34 (Application for a Certified Copy of Title) and submit it along with a valid ID and a $2.00 fee, either by mail or in person at your local TxDMV office.

Is Texas Car Insurance Expensive?

Yes, Texas car insurance is relatively expensive compared to the national average. Factors contributing to this include a high percentage of uninsured drivers, severe weather events, and high accident rates, especially in densely populated cities like Houston and Dallas.

On average, Texans pay around $1,800 – $2,000 per year for full coverage, which is roughly $300 – $500 higher than the national average.

Contact the Texas State Insurance Department

For questions or concerns about car insurance in Texas, you can contact the Texas Department of Insurance (TDI):

• Phone: 1-800-252-3439
• Website: www.tdi.texas.gov
• Mailing Address: Texas Department of Insurance, P.O. Box 149104, Austin, TX 78714-9104

The TDI can assist with filing complaints, understanding insurance policies, and providing information on insurance regulations in Texas.