Texas Auto Insurance Quotes and
Coverage Guide
Texas Motor Vehicle Insurance
Questions & AnswersQ: Is auto insurance mandatory?
A: It’s Where the West Begins, but we try to
downplay the “wild, wild” part by requiring proof of
financial responsibility for anyone who drives an
automobile in the state. Most (tame)Texans choose to
purchase liability insurance to meet this
requirement.
Q: Is Texas a "no-fault" state?
A: Kinda sorta. Texas is what is known in the
insurance biz as an “add-on” state. In add-on
states, drivers receive compensation from their own
insurance company as they do in no-fault states, but
there are no restrictions on lawsuits. In other
words, you can still get your chaps sued off if you
cross that cattle guard and smack the Mack truck you
somehow didn’t see coming right toward you.
Q: What type of insurance is required to purchase
and maintain a Texas tag and registration?
A: Liability insurance pays for bodily injuries,
property damage, and rental car expenses for which a
driver covered by your policy is legally
responsible. The minimum liability insurance
required by law is $20,000 bodily injury per person,
$40,000 bodily injury per accident, and $15,000 for
any cows the cattle guard didn’t guard when you
crossed it and hit one of them before you hit the
Mack. This is commonly called "20/40/15" coverage.
Liability insurance also pays attorney fees if you
are sued and bail up to $250 if you are arrested for
being a REALLY wild, wild Texas driver.
Q: What are some of the things that affect my
premiums?
A: Companies may use a number of criteria to
establish your individual premium. These include:
-- Your age, and for younger drivers, your marital
status: Male drivers under 25 and unmarried women
under 21 have the highest rates (the wildest
Texans). Drivers over 50 may get discounts
(considered tame – sometimes).
-- Your driving record and claims history: A good
driving record can save you money. If you have
accidents or tickets on your driving record, you’ll
likely be placed in a nonstandard company, which
charges higher rates. In addition, companies can add
penalties – called surcharges – to your premium for
major driving offenses and accidents resulting in
property damage of $1,000 or more. Surcharges are
mandatory for rate-regulated companies and stay on
your premium for three years – which gives you a
chance to tame down a little.
-- The county where you keep your car: Because urban
counties have more accidents, auto thefts, and
wilder Texans, their rates tend to be higher than
those of rural areas.
-- The type of car you drive: Collision and
comprehensive rates are highest for luxury,
high-performance, and sports cars – the kind most
wild Texans like to drive. Rates may also be higher
for cars that damage easily or cost more to repair
than others – the kind rich, wild Texans like to
drive.
-- How you use your car: Rates are higher for cars
driven to and from work or used for business –
because Texans have to drive forever to get
anywhere.
-- Your credit score: Companies may take a look at
your cowboy boots and consider your credit score
when deciding whether to sell you a policy and what
to charge you. However, a company cannot refuse to
sell you a policy, cancel, or not renew your policy
solely on the basis of your credit or the price of
your boots.
-- Whether you drove uninsured in Texas: Companies
can charge more if you drove uninsured in Texas for
more than 30 days in the 12 months before you
applied for insurance. Driving cattle is not
considered. However, a company cannot otherwise
charge you a higher rate for liability coverage
because of your prior lack of coverage.
Q: Is there any way I can save on a basic liability
policy?
A: Yes. Defensive driving and driver education
courses for young drivers can save you 10% off your
premiums, and having two or more cars on a policy
can discount it by 20 percent. Both discounts are
mandated by state law, so don’t forget to ask your
insurer about them – but don’t bring up the
wild/tame thing.
Q: I had a wreck, and now my insurer is canceling my
policy. Is that legal?
A: Depends on what you did or didn’t do, and whether
or not the company’s tryin’ to pull a fast one on
you. A company must explain in writing its reasons
for declining, canceling, or not renewing your
policy. This explanation must include the precise
incident, circumstance, or risk factor that violated
the company’s underwriting guidelines; and the
insurer’s sources of information about the incident,
circumstances, or risk factor. These cannot include
a phone call from your ex-mother-in-law or that cow
you hit.
An insurance company may not cancel an auto policy
that has been in effect for more than 60 days unless
you fail to pay your premium, you file a fraudulent
claim, or your driver’s license or motor vehicle
tags are suspended or revoked. This also applies to
other drivers who live with you or customarily use
your car, except for that cow that keeps using your
phone.
However, during the first 60 days, the company may
cancel a policy for any lawful reason, including a
ticket or an accident. If the company cancels your
policy because of an accident (what happened in your
britches when you finally noticed the Mack is not
considered), it still must pay for covered damages
resulting from the accident. The company must give
you written notice at least 10 days before canceling
your policy.
If either you or the company cancels your policy,
the company must refund any premiums paid in advance
that did not buy coverage. This amount is called the
"unearned premium." For example, if you paid a
six-month premium of $600, and you cancel your
policy after one month, the company owes you $500 in
unearned premium, and that’s plenty to go buy
yourself a brand new pair of britches.
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