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Car Insurance Fine Print: What You Don’t Read Can Hurt You

In an attempt to save money on their car insurance, many Americans opt for basic coverage. While it’s true that having some coverage is better than none at all, basic or minimum coverage may not be enough to protect you should you become involved in an accident. This is especially important in Texas, where drivers are required by law to pay for accidents where they are at fault. Let’s explore Texas car insurance requirements and what you need to make sure is included in your policy.

Damaged car bonnet in accident

Understand Texas Insurance Laws and Your Rights as a Driver

There is a minimum for, specifically, the amount of auto insurance drivers must purchase. As well, all drivers are protected by a Bill of Rights.

Financial Responsibility Law

In Texas, the majority of drivers take out auto liability insurance on their vehicles, which will cover payment for the repair or replacement of the other driver’s vehicle, as well as for the medical expenses of the other party if an accident is the fault of the policy holder’s. Under the Financial Responsibility Law, the minimum amount of automobile insurance coverage required by law is at least a 30/60/25 policy. Minimum liability pays $30,000 for each person injured, up to a total $60,000 per accident. Property damage per accident is covered for up to $25,000.1


While this may seem like a lot of money at the outset, the truth is that when you consider the high costs of medical treatment and current car prices, these coverage amounts may not be nearly enough. This is even more of an issue if you require medical care and car repair or replacement. If you find yourself under-insured, you can be sued by the other driver for damages, requiring you to obtain representation from an auto accidents lawyer in court.

Proof of Insurance

All drivers who purchase auto insurance in the state of Texas receive a proof-of-insurance card, which must be shown when a police officer requests it, when you are involved in an accident, or when you register or renew your vehicle registration. You must also present this card when you obtain or go to renew your driver’s license, as well as when you have your vehicle inspected for safety.

Your Rights

All Texas insurance companies are required to send drivers a copy of the Consumer Bill of Rights whenever they send you a copy of your auto insurance policy. This document outlines your rights as a driver in Texas. Therefore, you should review it and make sure you understand them.

Parts of Your Auto Insurance Policy

Careful review of your insurance policy is essential. Just because certain things are included in your coverage, it doesn’t mean they are included in someone else’s policy. The people who are covered may also differ. Some of the typical sections included in auto insurance policies include:

  • Exclusions
  • Declarations
  • Conditions
  • Coverage Parts/Agreement
  • Definitions

The Exclusions section spells out the limitations of your policy or which people are not covered. This section also includes any parts of your policy which may be deficient and require correction at a later date. Declarations are your personal details, such as the make and model of vehicle and your name and address. It also includes your insurance policy number, and the duration of the policy, as well as your deductible and policy limits.

Conditions outline your insurance company’s responsibilities, as well as yours. These include the steps you need to take to file your claim, as well as payment obligations, and tips for resolving disagreements that may arise with another driver or your insurance company. Coverage is the part of your policy which outlines the options and limits of the policy you purchased. Definitions provide you with meanings for the terms you will find in your policy, as well as your insurance company’s rights and your rights.

key on car insurance form

Coverage Types Explained

There are two main types of coverage made available by insurance policies. These are:

  • Comprehensive
  • Liability

Comprehensive coverage will cover your vehicle in the event it becomes damaged by any cause outside a collision or rollover. This type of coverage insures you in the event that your vehicle catches fire, is stolen or vandalized, or is damaged by a falling object. Comprehensive coverage includes a wide range of deductibles for you to choose from. The deductible is the amount you must pay before your insurance company pays you for damages.

Liability coverage ensures that your insurance company will pay for any medical expenses and costs to repair damage to the other driver’s vehicle. It can also cover the cost to hire a car accident lawyer. You can choose to add additional coverage to your liability policy, including:

  • Medical and funeral expenses incurred in an accident, whether you or the other driver were at fault. This additional coverage also includes injuries sustained as the result of being a pedestrian who was hit.
  • Coverage in the event you are involved in an accident where the other driver is not insured, or where the accident was a hit-and-run and found to be the fault of the other driver.
  • Coverage for instances where an under-insured motorist becomes involved in an accident with your vehicle.
  • Coverage for instances where an uninsured motorist becomes involved in an accident with your vehicle.

Comparison Shopping for Your Car Insurance

It’s always wise to compare rates before you purchase car insurance because rates will vary from one company to another. Reviewing which coverages you think you’ll need before you start shopping is also a good idea.

You should also get several quotes from insurance companies for the same types of coverage. When doing this, ensure you are truthful with companies so you get the most accurate coverage.

You’ll also want to take a look at your credit score prior to purchasing coverage, as some companies will use this to decide individual rates.

Do some research on the insurance companies you’re considering. Are their financial ratings indicative of good stability and financial strength? Also, look at their complaint index, as this will tell you more about their level of customer service. Finally, ensure they are licensed before you purchase a policy, even though it’s illegal to sell insurance in Texas without a license.

mechanic repairing car


Factors That Will Affect Your Rates

In addition to checking your credit score, an insurance company will also look at several other factors when determining your rates. Here are some of the most common factors:

Primary Use and Vehicle Type

Do you use your vehicle to drive to and from work? If so, your rates will be higher. Similarly, if you drive a sports car or luxury vehicle, or your car is damaged easily and costs more to repair, you are very likely to pay higher rates.

Age, Marital Status, and Driving Record

The highest rates can be found among unmarried women under 21 years of age and men under 25. If you’re a driver over 50, you may be able to get your insurance rate discounted. The better your driving record, the more money you can save on your insurance rate. If you’ve been charged with particular violations, have tickets and other accidents on your record, or have been involved in an accident that caused property damage, you are likely to be charged more.

If you drove without insurance in the State of Texas for more than 30 consecutive days in the year before applying for insurance, you will be charged more. However, it is illegal for an insurance company to charge you more for liability because you didn’t have coverage prior.

Injured in a Car Accident? Here’s What to Do

Being involved in a car accident can mean sustaining injuries such as whiplash, lacerations, and broken bones. If you were the victim of a car wreck that wasn’t your fault, and you have become injured, your symptoms could last for years. How can you get the compensation you deserve? By contacting an experienced and determined auto accident attorney as soon as possible after having received medical treatment.

The attorneys of Schechter, McElwee, Shaffer & Harris, L.L.P. have 45 years of experience dealing with all kinds of accidents, and all major insurance companies. Don’t wait to get compensation for your injuries; Schechter, McElwee, Shaffer & Harris, L.L.P. can help you today. Call 713-364-0723 for an absolutely free evaluation of your case.