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Do I need to buy vehicle insurance in Texas?

In Texas, state law mandates that drivers must show proof that they can pay for any accidents that they cause. That is why most drivers buy auto liability insurance.

Liability insurance kicks in to pay to repair or replace the other driver’s vehicle, other property that has been damaged, and covers some medical costs when you are deemed to be the person responsible for the crash. It’s also important to know that if you are still paying off your vehicle, your lender requires that you have comprehensive and collision coverage because it covers their investment in you.

There are eight basic vehicle insurance coverages available. Those are liability, collision, comprehensive other than collision, medical payment coverage, personal injury protection, uninsured/underinsured coverage, towing and labor coverage and rental reimbursement coverage. That’s a lot to choose over and above what is legally mandated.

What each choice of insurance coverage provides:

  • Liability coverage: the Texas minimum limits are referred to as 30/60/25 coverage as it covers $30 thousand of injuries per person, $60 thousand per accident and $25 thousand for property damages. A person can buy almost an unlimited amount of liability coverage.
  • Collision coverage: repairs/replaces the driver’s vehicle post accident.
  • Comprehensive coverage: pays if a vehicle is damaged by something other than a collision (this would include things like hail damage or theft)
  • Medical payments coverage: sometimes referred to as MedPay, covers the driver’s and passenger’s medical expenses.
  • Personal injury protection (PIP): similar to MedPay coverage, but also covers lost wages and other non-medical costs. All Texas vehicle policies include PIP unless you decline it in writing. PIP is also better than MedPay because PIP does not have a subrogation provision.
  • Uninsured/underinsured motorist coverage: this policy covers a driver hit by someone who was not insured or does not have enough insurance to cover the full amount of a person’s damages. It covers hit and run accidents and must be offered by insurance companies. If you do not want it, you have to decline it in writing.
  • Towing/labor coverage: covers cost of towing if a vehicle cannot be driven and pays for labor to jump-start a car or change a flat.
  • Rental reimbursement coverage: a driver can rent a car if they had their vehicle stolen or if it is in for repairs after an accident. Some policies may pay for ride-hailing services or a taxi

Other Texas Uninsured / Underinsured Motorist FAQs: