insurance limit

If you drive a vehicle in the state of Texas, you are required by law to pay for any auto accidents you may cause.  Buying automobile liability insurance can most easily satisfy this legal obligation.  Most states have established minimum liability limits, but it is important to understand some reasons why minimum Texas auto insurance may not be enough. 

Satisfying Texas Financial Responsibility Law

Liability insurance is designed to repair or replace the other driver’s vehicle if you are found to be at fault in an auto accident.  It also pays any medical expenses that may be related to an at fault accident.  In order to meet the Texas financial responsibility law, a vehicle owner must purchase the following minimum amount of liability insurance coverage:

  • $30,000 Bodily Injury Liability (each person)
  • $60,000 Bodily Injury Liability (each accident)
  • $25,000 Property Damage Liability (each accident)

This 30/60/25 minimum auto coverage will allow you to drive legally on Texas roads and highways, but it may not provide the insurance protection you actually need. 

Minimum Insurance Coverage Does Not Protect Your Vehicle

The minimum coverage shown above provides absolutely no insurance coverage to repair or replace your personal vehicle that may be damaged or destroyed in an accident.  If you drive an older vehicle that you could easily replace, this type coverage might be sufficient.  If you drive a vehicle that would cost several thousands of dollars to replace, you should consider purchasing collision coverage.  Also, you may need to find a replacement vehicle should yours be damaged or destroyed in an accident. Rental reimbursement coverage could be very important.

Minimum Texas Auto Insurance May Not Cover Costs

Car prices are steadily increasing and the cost of medical care is going through the roof.  These minimum limits of liability coverage may not be sufficient to pay all the other driver’s costs.  Let’s assume that you were found to be at fault in an accident that totally destroyed a $30,000 sports car.  Under your minimum insurance policy, your insurance company will only pay $25,000.  This would mean that the remaining $5,000 would have to be paid out-of-pocket.  It is not uncommon for hospital and medical care expenses to reach $100,000 or more.  With minimum coverage, the insurance company will only pay a maximum of $60,000 per accident.  If your insurance coverage is not enough to pay the total costs, the other driver can sue you to collect the difference.  Minimum auto insurance coverage may not protect you and your family financially.

Minimum Auto Insurance Coverage Does Not Protect You Against Uninsured Drivers

Even though Texas law provides penalties for not buying minimum auto insurance coverage, there are those who simply don’t abide by the law.  In fact, according to the Texas Department of Insurance, one in five drivers on Texas roads are uninsured.  Uninsured or underinsured auto insurance will offer you the financial protection should your vehicle be damaged or destroyed by one of these uninsured motorists. 

Insurance companies who proudly advertise that they will keep you legal really aren’t doing you any favors.  Just driving legal in Texas may end up costing you a lot more money than it would have cost to buy adequate auto insurance in the first place.  If you don’t understand your auto insurance policy or are concerned about your coverage amounts, the best thing to do is to sit down with an experienced auto insurance agent. 

About Dean and Draper Insurance Agency

Founded in 1980 by President and CEO Bob Dean, Dean and Draper Insurance Agency caters to an international roster of clients from five offices, including its headquarters in Houston. Through a network of more than 200 diverse insurers, the independent company offers the most competitive, comprehensive policies for personal and commercial insurance needs.  This National Top 100 agency in Property & Casualty and Top 50 agency in personal policies underwrites in excess of $150 million in annual auto, home, health and corporate premiums and employs over 135 people.