Under Texas's status as a "fault" car accident state, drivers are required to demonstrate their financial responsibility for any crash they might cause. Most Texas drivers do this by buying car insurance, and state law requires certain minimum amounts of coverage. We'll discuss those minimums in this article, plus a few other important Texas car insurance rules.
Texas uses a "fault" system when it comes to liability for a car accident. In the words of the Texas Department of Insurance, a "fault" system is one that requires drivers to "pay for the accidents they cause."
After an accident occurs, an injured driver, passenger, or pedestrian may decide to file a claim with his or her own auto insurance carrier first, in what's known as a "first-party" claim. The injured person may also decide to seek compensation from the other driver's insurer, by filing what's known as a "third-party" claim. (The "second party" is always the insurance company.) Finally, an injured person may also choose to go to court and file a personal injury lawsuit against the at-fault driver, seeking compensation for medical bills, property damage, pain and suffering, and other losses related to the accident.
(By contrast, "no-fault" states usually require a policyholder's own insurer to pay for their medical bills, lost income, and other out-of-pocket losses -- up to certain minimums -- regardless of who caused the accident. In no-fault states, an injured person must meet certain threshold requirements in order to step outside the no-fault car insurance system and make a claim against the at-fault driver.)
As touched on above, Texas requires drivers to demonstrate their financial responsibility in case they cause a car accident on the state's roads and highways. Most vehicle owners choose to comply with this requirement by purchasing car insurance. If you're buying car insurance in Texas, the law requires you to have the following minimum amounts of liability car insurance coverage:
This basic coverage -- known as "30/60/25" coverage for short -- pays the medical bills, property damage bills, and other costs of drivers, passengers, and pedestrians who are injured or have their vehicle damaged in a car accident you cause, up to coverage limits. You can (and in some situations should) carry more coverage to protect you in case a serious crash results in significant car accident injuries and vehicle damage. Remember, once policy limits are exhausted, you are personally on the financial hook, so higher insurance limits can help protect your personal assets in the event of a serious crash.
Your liability coverage will kick in if any family member is driving your vehicle, or if you've given someone else permission to use it. It will likely also cover you if you get into an accident in a rental car.
You'll need to carry your insurance card or proof of insurance in your vehicle with you, in case you are asked to present it to a law enforcement officer during a traffic stop. Failing to carry insurance or to provide proof of insurance when asked for it can result in fines and other penalties, especially if you're involved in an accident.
Finally, remember that the liability coverage we discussed here doesn't apply to your own injuries or vehicle damage after a car accident. You'll need different (additional) coverage for that if you're involved in a car accident and no one else's coverage applies to your losses. For example, personal injury protection (PIP) or MedPay coverage can be used to pay your car accident medical bills, and collision coverage can pay for repairs to (or replacement of) your damaged vehicle after a car accident.
Texas does not require drivers to buy uninsured/underinsured motorist coverage, but it does require insurance companies to offer this kind of coverage, which can provide additional protection if you're in an accident with someone who has no car insurance, or whose coverage won't pay for your medical bills and other losses. In Texas, all uninsured/underinsured motorist coverage is subject to a $250 deductible, which you must pay before the insurance company will pick up the remaining bills up to coverage limits.
The Texas Department of Insurance website offers more information on auto insurance in Texas, including advice on choosing the right coverage.