Texas law requires drivers to be able to pay for the accidents they cause. Most people meet this requirement by buying automobile "liability" insurance. Liability insurance pays to treat people injured in an accident that you cause. It also pays to repair or replace the other driver´s damaged property.
You must have enough liability insurance to pay up to $25,000 in medical expenses for each person injured in an accident, up to a combined total of $50,000 for everyone who was hurt in an accident. You also must have at least $25,000 in coverage to pay to repair or replace the other driver´s car. Because of these coverage amounts, basic minimum liability coverage is often called "25/50/25 coverage."
Medical care and vehicle repair or replacement costs can be expensive. Therefore, minimum coverage might not be enough to cover your financial obligations if you cause a serious accident. It´s a good idea to consider raising your coverage limits. Raising your coverage limits will raise your policy premium, however.
Liability insurance pays to repair or pay for the other driver´s car. It won´t pay to fix your car, however. You will need to add "collision" coverage to your policy to pay to fix your car if it´s damaged in a wreck that you caused. "Comprehensive" coverage pays to repair or replace your car if it´s stolen or damaged by hail, fire, road debris, vandalism, or other similar covered risks. Texas law does not require you to have collision and comprehensive coverage. However, if you still owe money on your car, your lender will probably require you to have them. If your car is damaged in a wreck caused by another driver, the other driver´s insurance will pay to fix your car, up to the other driver´s policy limits.
You might also wish to add "Personal Injury Protection," commonly called PIP. PIP will pay for your and your passenger´s medical expenses and will replace some lost wages if you´re unable to work because of an accident. "Uninsured/Underinsured Motorist" (UM/UIM) coverage pays your expenses from an accident caused by a driver who doesn´t have insurance or doesn´t have enough insurance to cover your bills, up to your policy´s dollar limits. UM/UIM also pays for accidents caused by a hit-and-run driver if you report the accident promptly to the police.
Driving without auto insurance is against the law. A law enforcement officer will require you to show proof that you have auto insurance during any traffic stop. Your insurance company will provide you with an "insurance card" that will qualify as proof as insurance. The card will explain the basic features of your auto policy, including the dates the coverage begins and ends. You should keep your insurance card with you while driving.
If you are unable to show proof of insurance, you will probably get a ticket. You could face a fine of $175 to $350 for a first offense. If you are stopped again without proof of insurance, you could be fined up to $1,000, your vehicle could be impounded for 180 days, and you could have your driver´s license suspended.
The financial consequences of driving without insurance can be even more severe. If you cause an accident, you will be financially liable for any resulting injuries or property damage. In the event of a serious accident, you could have to pay tens of thousands of dollars out of your own pocket. If you can´t pay the amount you owe, you could be sued, and a court could order that the money be deducted from your current and future earnings. In addition, it could mean that a person you´ve injured will have difficulty getting the medical care necessary for a complete recovery.
No. All applicants for a Texas driver´s license must show proof of insurance to get a driver´s license. You´ll have to show proof of insurance regardless of whether you´re getting a driver´s license for the first time, renewing your driver´s license, or getting a Texas driver´s license after moving from another state.
You have to show proof of insurance any time a law enforcement officer asks you to. A law enforcement officer will ask you for proof of insurance if you´re involved in an accident, regardless of whether you caused the accident or not. Police will also ask you for proof of insurance if you´re stopped because of a traffic violation or for any other reason. You also have to show proof of insurance when you get or renew your driver´s license, register your car, and get your car inspected.
In general, companies base their rates on their estimate of the likelihood that you will be involved in an accident. Statistics show that younger drivers are more likely to be involved in accidents than older, more experienced drivers. Therefore, rates for younger drivers will usually be more expensive. If you have collision and comprehensive coverage on your policy, the kind of car you drive will also affect your rates. Expensive cars and cars built for speed are more expensive to insure. Likewise, cars with safety or anti-theft features are usually less expensive to insure.
Each insurance company has its own method for determining your risk. It is unlikely that any two companies will calculate your risk to be the same or offer you an identical rate. Some companies may decide that you´re too great a risk and refuse to sell you a policy. If that happens, keep shopping. Since companies calculate risk differently, you may be able to find another company willing to insure you. Rates can vary greatly from one company to the next, so shopping around can also help save you money.
Each company evaluates risk differently. All companies generally use some type of formula that considers a variety of "risk factors." These factors include:
- Driving history. One of the most important indicators of the way you will drive in the future is the way you´ve driven in the past. If you´ve previously caused an accident, an insurance company might reasonably assume that you could cause another accident in the future. Companies also will consider whether you´ve gotten any speeding tickets or other moving violations. If you have accidents or tickets on your driving record, you will pay more for insurance. If you have multiple accidents or tickets, some companies may refuse to sell you a policy.
- Age. Statistics show that young, inexperienced drivers are more likely to cause accidents. As a result, younger drivers, especially teenagers, pay higher rates for auto insurance. Insurance rates for good drivers generally drop considerably after age 25.
- Gender. At younger ages, male drivers are statistically more likely to be involved in an auto accident than female drivers are. Therefore, younger male drivers tend to pay higher rates. After age 30, the accident risk of male and female drivers is generally considered equal.
- Lifestyle. People who are married or have children tend to be involved in fewer accidents and generally pay lower rates.
- Credit history. Statistics show that drivers with poor credit histories tend to have more accident claims than drivers with good credit. Many, but not all, insurers use credit scores to help determine a driver´s accident risk. If you haven´t had time to develop a credit history because of your age, insurance companies generally won´t count your lack of history against you. However, most companies will consider your credit history in the future when you renew a policy or change companies. Therefore, maintaining a good credit history by paying your bills on time and avoiding excess debt can result in lower auto insurance rates.
Your premium will vary according to your individual circumstances. Therefore, it´s impossible to list a meaningful "average" premium. To get an idea of what you can expect to pay for auto insurance, view our Automobile Insurance Price Comparisons. Compare the price estimates for the driver profile that most closely matches your situation.
The best way to lower your premium is to be a safe driver. Companies offer the best rates to drivers without accidents, speeding tickets, and other traffic violations.
Here are some other tips to help you save money:
- Ask about discounts. Insurers often provide discounts to customers who meet certain criteria. For instance, some companies may offer discounts if you make good grades in school or drive a car with safety and anti-theft features. Ask your insurance agent whether the company offers discounts and if you qualify.
- Drive a safe vehicle. Insurance rates are higher for convertibles and sports cars because they tend to be driven at higher speeds and often provide occupants with less protection than other types of cars. Driving a car with safety features such as anti-lock brakes and air bags will likely lower your premium.
- Consider higher deductibles. Your deductible is the amount you must pay out of your own pocket before the insurance company will pay. For instance, if your policy has a $250 deductible, and you cause a wreck that results in $1,000 in damages, you´ll have to pay $250, and then your insurance company will pay the remaining $750. Policies with higher deductibles tend to be cheaper because the company will pay a smaller share of any loss. But remember, although your premiums will be lower if you raise your deductible, you´ll have to pay more out-of-pocket if you have a claim.
No. In Texas, insurance may only be sold by an insurance agent or broker licensed by the Texas Department of Insurance (TDI).
In most cases, the vehicle owner´s insurance pays for losses, regardless of who was driving. This means that if you´re in wreck while driving a friend´s car, your friend´s policy will usually pay. If you have an auto policy, your insurance would pay any remaining amount that exceeds your friend´s policy limits. If your friend does not have insurance and you´re involved in an accident while driving his or her car, your policy will pay. Likewise, if a friend has an accident while driving your car, your policy will pay first, and your friend´s policy will pay any remaining amount that exceeds your policy limits. If you do not have insurance and your friend is involved in an accident while driving your car, your friend´s policy will pay.
The insurance company will only pay up to the amount of your policy´s dollar limit. This means that if your policy´s property damage limit is $15,000, the company will only pay $15,000 to fix the other driver´s car. You will have to pay the rest yourself. The minimum liability coverage requirements might not be enough to meet your financial obligations if you´re involved in a serious wreck. It´s a good idea to consider buying a policy with more than the minimum required coverage limits.
Yes. Companies will consider your driving record, including any wrecks you´ve caused and tickets you´ve gotten, to decide whether to issue you a policy. Most insurers routinely check the state database of traffic citations to verify that their policyholders have not received any unreported citations.
An insurer may cancel your auto policy within 60 days of your initial purchase for any reason. Therefore, if you get a ticket within this timeframe, your insurer could decide to cancel your coverage. After 60 days, your insurer generally may not cancel your coverage unless you failed to pay your premium or committed insurance fraud. However, your insurer could decline to renew your coverage if you received a ticket during the previous policy term.
Most companies generally won´t cancel or refuse to renew your policy for a single ticket. You can expect the company to raise your rates when your policy is renewed, however. Receiving multiple tickets significantly increases your chances that a company will decide not to renew your policy when it expires.
If you´re convicted of driving under the influence (DUI) or driving while intoxicated (DWI), you can expect to pay considerably higher rates. These convictions could also cause your insurer to decline to renew your coverage. Most insurers consider your driving record for the previous three years. Companies usually consider any DUI or DWI convictions you received in the previous five to seven years.
Most law enforcement jurisdictions in Texas will allow you to take a certified, six-hour defensive driving course to remove tickets from your driving record. Generally, you can only take defensive driving once a year to remove one ticket. You may not take defensive driving to remove tickets for DUI, DWI, or for speeding more than 25 miles per hour the posted limit. You must pay to take the course. However, taking defensive driving may eliminate or reduce the fine.
Insurance companies acquire discovery rights when one initially agrees to purchase their policy. Insurance carriers have the right to discover additional licensed or permitted operators in the household where the named insured garages his automobiles. Acquiring driver's and claim history is also a part of the discovery process to arrive at a rate that equals the exposure of the newly determine driver. Should the insured decide that the new driver will under no circumstances operate their vehicle nor operate any other vehicle assuming, that driver is a minor, the insured can legally exclude the operator and not be subject to the additional premiums.
It is important to know auto insurance carriers in Texas have different age parameters for adjustment of insurance premiums. This criteria is carrier specific. For example one may find his or her auto rate decreasing when they turn 55 only to see it increase again at 75. In this case, the carrier has determined from it's actuarial loss ratios it's drivers over age 75 now may pose a higher liability risk.
Removing collision and comprehensive coverage from a specific vehicle's coverage, requires the insured to completely understand that the responsibility of repairing or replacing that vehicle rest exclusively with the insured. The insurer bears no responsibility to restore or replace the vehicle since physical damage coverage has been eliminated by the insured. Certain collision coverage may still exist under the uninsured motorist provision if that coverage has been purchased by the insured. However, the party causing the accident must be deemed to be at fault. Many Texas insurers agree that the minimum cost for a reasonable vehicle is $2,000.00 (assuming that the vehicle being purchased is equipped with functioning air conditioning and is in a safe driving condition). Should you determine your vehicle is worth less than the stated amount, it is conceivable that the cost of collision and comprehensive coverage, coupled with the outlay of your deductible at the time of the repair, may create a unjustifiable insurance investment. Some insured base their decision on their individual financial position, raising the bar to $4,000 or $5,000, agreeing to replace the vehicle that is worth less than the stated amounts themselves rather than filing a insurance claim.
One should always notify his or her agent or the insurer, preferably in writing, about the custom changes to the vehicle that is being insured. Ask for acknowledgement of the receipt of your notification. The carrier may charge additional premium for the added physical damage exposure.
Insurers have the right to determine if a pet creates a high liability risk due to the nature of it's temperament. Examples: Vicious dogs, large snakes, and or poisonous reptiles.
The owner of tree has a duty to exercise proper care in maintaining his property, however the burden of proof may fall on you to establish the neighbor was negligent in his maintenance.
Many times homeowners are amazed that two adjacent properties can encounter the same wind and or hail storm, but be evaluated very differently by claims examiners. It is important to note that a single storm can cause enormous damage to one property, yet leave the adjoining property of a neighbor virtually unscathed. Although this analogy may seem extreme, it does point to the unstable nature of Texas storms and this coupled with the many differences in home construction and age of structure, certainly require each claim to be judged on its own merit. Texas homeowners should realize a second opinion from a reputable contractor is important, should a vast discrepancy occur between the insurance adjuster and the homeowner. Regarding interior damage, be sure to understand water damage originating from windstorm and or hail must come thru a opening caused by the named peril or perils windstorm and or hail in order to constitute coverage.
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