Texas Auto Insurance: What's The Best 'Abt' Policy?

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Collision coverage

The cost of collision coverage varies from driver to driver and policy to policy, based on factors such as age, gender, marital status, driving record, the vehicle you drive, and where you live within your state. Collision coverage typically has a deductible that applies separately to each occurrence, meaning you will have to pay the deductible each time you file a claim. Deductibles usually range between $500 and $1,500, with $500 being the most common.

While collision coverage is not mandatory in Texas, it is highly recommended for car owners. If you are involved in an accident and are at fault, your state-mandated auto liability insurance will only cover the damages caused to the other car and will not cover the cost of repairing or replacing your own vehicle. Collision coverage can, therefore, protect you from expensive repair or replacement costs.

Comprehensive coverage

The cost of comprehensive coverage depends on factors such as the age and model of your car, your driving history, and the deductible you choose. According to the Insurance Information Institute, the average cost of comprehensive insurance in the US was about $170 per year in 2018.

When purchasing comprehensive coverage, you will need to select a deductible amount. The deductible is the amount you pay on a claim before your auto coverage kicks in. For example, if you have a $1,000 deductible and your car repairs cost $6,000, you will pay the $1,000 deductible, and your insurance company will cover the remaining $5,000.

Uninsured/underinsured motorist coverage

Uninsured motorist coverage comes into effect when you are hit by a driver who does not have auto insurance. This coverage will pay for your injuries, your passengers' injuries, and damage to your vehicle. If the driver does not have insurance, Uninsured Motorist Bodily Injury (UMBI) may cover medical bills for you and your passengers, while Uninsured Motorist Property Damage (UMPD) may cover vehicle repairs.

Underinsured motorist coverage, on the other hand, protects you if you are hit by a driver whose insurance coverage is insufficient to pay for the damages or injuries they caused. Underinsured Motorist Bodily Injury (UIMBI) may cover medical bills for you and your passengers, and Underinsured Motorist Property Damage (UIMPD) may cover vehicle repairs.

In Texas, insurance companies are required to offer you this coverage. If you choose to decline, you must inform the company in writing. This coverage can provide valuable protection in the event of a hit-and-run accident or an accident with an uninsured or underinsured driver. Without it, you could be left paying for medical bills or vehicle repairs out of your own pocket.

It is worth noting that in some states, a deductible may be required for UMPD/UIMPD, but UMBI/UIMBI generally does not include a deductible. Additionally, if you have health insurance, there may be some overlap with UMBI and UIMBI coverage. It is important to carefully review your insurance policy and understand your coverage and exclusions to ensure you have the protection you need.

Medical payments coverage

Medpay is a "no-fault" type of coverage, meaning that it does not matter who is at fault in the accident for the insured to seek compensation. It provides coverage for the driver, the driver's family members, any passengers in the driver's car, and other injured people, including cyclists or pedestrians hurt in the accident.

In Texas, auto insurance companies are required to automatically include PIP coverage in their policies, but Medpay is optional. If an insurance company does not offer PIP coverage, they must have a written rejection from the insured.

When deciding between Medpay and PIP coverage, it is important to consider the benefits of each. While Medpay may be slightly less expensive than PIP coverage due to the subrogation process, PIP coverage provides more comprehensive protection, including lost wages and the ability to "stack" coverage under multiple policies.

Personal injury protection (PIP) coverage

In Texas, all auto policies include PIP coverage, but it can be removed if the policyholder specifically requests it in writing. PIP is mandatory in 15 states and Puerto Rico, and optional in several others. While the minimum coverage amount is set by state governments, the maximum coverage amount is determined by insurance companies, typically not exceeding $25,000.

For example, in Florida, the minimum PIP coverage required is $10,000. If a policyholder caused an accident that resulted in injuries requiring medical treatment costing $15,000, their PIP coverage would pay $10,000. If they had purchased a plan with higher coverage, their insurance would pay for expenses up to that higher limit.

PIP is distinct from liability insurance, which only covers medical costs for third parties (not the policyholder) if the policyholder is at fault. PIP is also different from bodily injury liability coverage, which covers medical expenses for someone injured in an accident caused by the policyholder.

Frequently asked questions