Alyssa Lane
Texas law requires drivers to show proof that they can pay for any accidents they cause. Most drivers do this by purchasing auto liability insurance. Liability insurance pays to repair or replace the other driver's car and pays for other people's medical expenses when the policyholder is at fault in an accident.
What You'll Learn
Collision coverage
In Texas, collision coverage is not mandated by state law. However, it is a valuable addition to your auto insurance policy. If you lease or finance your vehicle, your lender will likely require you to purchase collision coverage to protect their investment. Even if you own your vehicle outright, collision coverage can provide financial peace of mind in the event of an accident.
The cost of collision coverage varies depending on several factors, including your age, gender, marital status, driving record, and the type of vehicle you drive. On average, Texans pay around $344.85 per year for collision coverage, but this can range from less than $200 to over $500. Additionally, collision coverage typically comes with a deductible, which is the amount you must pay out of pocket before the insurance company covers the remaining cost of repairs or replacement. Deductibles usually range from $500 to $1,500.
When deciding whether to purchase collision coverage, consider the value of your vehicle and your ability to pay for repairs or a replacement out of pocket. If your vehicle is new or has a high value, collision coverage can help with the potentially high cost of repairs or replacement. Additionally, if your vehicle will be in storage for an extended period, such as a boat or RV, you may not need collision coverage during that time.
In summary, while collision coverage is not mandatory in Texas, it is a valuable option to protect yourself financially in the event of an accident. It covers a wide range of collision-related incidents and can provide peace of mind, ensuring you don't have to bear the full financial burden of vehicle repairs or replacement.
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Comprehensive coverage
In Texas, auto insurance is meant to protect you financially in the event of an accident. While Texas law requires drivers to show proof that they can pay for any accidents they cause, the type of coverage is up to the driver. Comprehensive coverage is an optional type of auto insurance that will help compensate you should your vehicle need to be replaced or repaired due to an event that’s not a collision.
When deciding whether to purchase comprehensive coverage, consider the value of your vehicle, your driving habits, the local crime rate and natural disaster risk, and your current financial situation. If your vehicle was damaged or totaled, would you be able to pay for the repairs or replacement out of pocket? If not, comprehensive coverage could be a good option to avoid a financial headache.
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Uninsured/underinsured motorist coverage
This type of coverage is useful in a hit-and-run accident, where the other driver cannot be found, or if the at-fault driver's insurance policy doesn't cover all the damage. It can also help cover long-term care needs or loss of earnings if you are unable to work after an accident.
- Car repairs and replacement of property in your car
- Rental car costs
- Medical bills for you and your passengers
- Pain and suffering costs
- Diminished value of your car after the accident
The deductible for uninsured/underinsured coverage is $250, which is much lower than the deductible for collision coverage. You can usually add this coverage in $5,000 increments, and it is recommended that you add enough to at least cover the cost of replacing your vehicle.
Insurance companies in Texas are required to offer you uninsured/underinsured motorist coverage when you buy auto insurance. If you don't want it, you must decline it in writing.
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Medical payments coverage
MedPay is typically sold with a $2,500 limit, and it only covers past medical bills. It reimburses your health insurance deductibles and co-pays within one year of the accident. Unlike PIP, MedPay does not cover lost wages or essential services for unemployed injured persons, such as child and lawn care.
MedPay can be collected against the other person's liability insurance if you have a liability claim. This means it will affect your settlement negotiations with the at-fault party's insurance company because your insurance company will attempt to recoup the money they paid for your medical expenses from your settlement. This can complicate your negotiations with the other side.
It's important to carefully review your auto insurance policy to understand the specific details of your MedPay coverage, as what is covered may vary.
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Personal injury protection (PIP) coverage
Personal injury protection (PIP) is an optional auto insurance coverage in Texas that pays for your own medical care, lost wages, and other related expenses if you're hurt in a car accident. PIP insurance covers you and anyone riding in your car, regardless of who is responsible for the crash.
In Texas, insurers are required to offer personal injury protection automatically, but policyholders can opt out of the coverage if they don't want to pay for it. However, to opt out, policyholders will need to submit their refusal in writing.
Personal injury protection provides compensation for medical bills and other costs associated with car accidents. The amount of coverage provided by PIP plans varies depending on how much a policyholder paid for. Texas law requires that insurers offer a minimum of $2,500 in coverage, which can typically be increased to $5,000 or $10,000 if desired.
Some costs covered by personal injury protection include:
- Medical bills associated with injuries caused by an accident
- Transportation by ambulance
- Physical therapy and other rehabilitation
- Lost wages from injuries
- The cost of hiring at-home care
- Funeral and burial costs
Personal injury protection is beneficial as it provides relief for families who are in financial need but cannot wait for the outcome of litigation or a third-party claim. Since PIP claims are unaffected by fault, policyholders can reasonably expect a prompt payout shortly after a car accident.
It is important to note that personal injury protection only covers some of the costs of a car accident. If an individual causes a car accident due to negligent behavior, they may need to compensate the other party beyond the coverage provided by their PIP insurance.
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Frequently asked questions
Texas law requires drivers to show proof they can pay for the accidents they cause. Most drivers do this by buying auto liability insurance.
Liability insurance pays to repair or replace the other driver’s car, or other damaged property, and pays other people’s medical expenses when you’re at fault in an accident.
Texas law requires you to have at least $30,000 of coverage for injuries per person, up to a total of $60,000 per accident, and $25,000 of coverage for property damage. This is called 30/60/25 coverage.
If you don't have auto insurance and are found at fault in an accident, you will be required to pay for the damages and injuries you cause out of your own pocket. The other driver could also sue you.
