As an automobile accident attorney, I have met with several clients over the years who had no idea what coverages they had on their automobile insurance policies.
It is important that all Texas drivers and vehicle owners know and understand these 6 basic principles of Texas automobile insurance:
1) Liability Insurance- Texas law requires people who drive in Texas to be able to pay for the automobile accidents they cause. Most drivers do this by buying automobile liability insurance. Liability insurance pays to repair or replace the other driver’s car and pays other people’s medical expenses. This is where every new client gets confused…..Liability insurance DOES NOT pay to repair or replace your car or for your injuries. You must have at least the minimum amount of liability insurance coverage required by Texas’ state financial responsibility law, which as of April 1, 2008, is $25,000.00 for each injured person up to a total of $50,000.00 per accident. As for property damage, the Texas state limits is $25,000.00. This is known in the insurance industry and legal field as “25/50/25 basic coverage”.
Tip: Remember, the 25/50/25 are the least amount of liability coverages that you have to buy. Because of car prices and the high cost of medical care, the minimum amounts are often not enough to compensate a person if you cause an accident. If your liability limits are too low to pay for all of the other driver’s costs, the injured driver is legally permitted to sue you to collect the difference. To protect yourself financially, consider buying more than the basic limits.
2) Medical Payments Insurance- This coverage pays for the medical bills for YOU, YOUR FAMILY MEMBERS, and YOUR PASSENGERS involved in an automobile accident. This amount is paid regardless of who caused the accident.
3) Personal Injury Protection Insurance (also knows as “PIP”)- This coverage pays the same as the Medical Payments Insurance above PLUS 80% of lost wages for YOU, YOUR FAMILY MEMBERS, and YOUR PASSENGERS involved in an automobile accident. This amount too is paid regardless of who caused the accident.
Tip: Your automobile insurance company MUST offer you at least $2,500.00 in PIP, but you have the option to buy more. However, if you decide against PIP, you must reject it in writing.
4) Uninsured/Underinsured Motorist Insurance (also known as UM and UIM)- This coverage pays for YOUR expenses from an auto accident caused by an uninsured driver or an underinsured driver who did not have enough insurance to cover your expenses such as YOUR medical bills, YOUR lost wages, and YOUR pain and suffering. This UM and UIM coverage also pays for accidents caused by hit and run drivers, ONLY IF timely reported to the police. You can purchase both Bodily Injury UM/UIM and Property Damage UM/UIM from your automobile insurance company. Property Damage UM/UIM pays for YOUR auto repairs, YOUR rental car. However, for Property Damage UM/UIM, there is an automatic deductible of $250.00, which means that you must pay for the first $250.00 of YOUR repairs.
Tip: UM/UIM covers YOU, YOUR FAMILY, YOUR PASSENGERS, and others driving your car with your permission. Your automobile insurance company MUST offer you the option to purchase UM/UIM coverages. However, if you decide against purchasing UM/UIM coverages, you must reject it in writing.
5) Collision Insurance- This is damage to YOUR car from an automobile accident. This coverage pays the cost of repairing or replacing your car after an automobile accident. However, payment is limited to your car’s actual cash value, minus your deductible. Actual cash value is the market value of a car like yours without damages.
Tip: If you still owe money on your car, your bank or lender will require you to have collision insurance coverage.
6) Comprehensive Insurance- This is physical damage to YOUR car NOT caused by an automobile accident. This coverage pays for the cost or replacing or repairing your car if it is stolen, damaged by fire, vandalism, hail, or any other cause other than an accident. However, this coverage will ONLY cover you for a stolen vehicle if it is timely reported to the police. Once again, payment is limited to your car’s actual cash value, minus your deductible.
Tip: The same as collision, if you still owe money on your car, your bank or lender will require you to have collision insurance coverage.
By reviewing and understanding these 6 basic principles of Texas automobile insurance and the tips, you will be better prepared next time you renew your automobile insurance or even if you ever have to make an insurance claim for your vehicle.
Attorney Scott Edgett is a civil trial attorney with the Humphreys & Peterson Law Firm in Dallas, Texas. Mr. Edgett is licensed to practice law in Texas and Florida. Over the last decade, Mr. Edgett has emphasized on providing superior client representation in a professional and ethical manner, while experiencing high job satisfaction and trying to make the world a safer place for all. Mr. Edgett has been representing families and consumers whose lives have been devastated by reckless drivers, dangerous products and other negligent tortfeasors. When a tragedy occurs because of the irresponsible behavior of a tortfeasor, an insurance company, or a corporation, Mr. Edgett and the firm of Humphreys & Peterson are advocates for the people and will help pursue justice for all. To speak directly to Attorney Scott Edgett, please feel free him at (866) 259-0661, via email at Scott@TexasJusticeForAll.com, or visit our website at http://www.TexasJusticeForAll.com.
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