What Is Mandatory Insurance Coverage in Texas?

They don’t make many things mandatory in Texas, but one thing the Lonestar State does require is having a minimum level of car insurance if you’re a driver.

If the police pull you over for a traffic stop or if you’re involved in an accident, you must be able to show proof of mandatory insurance coverage in Texas. If you cannot, you could face significant penalties, including:

• A fine of up to $350 for the first offense
• Vehicle impoundment
• Suspension of registration

It’s also compulsory to show proof of insurance when getting a driver’s license, registering your car, or renewing a registration. Currently, you also must show proof of insurance and will need to pass an annual vehicle inspection. With a new law signed in 2023, in Texas you won’t need an inspection starting in 2025.

Auto Insurance Requirements in Texas

So, what is the mandatory insurance coverage in Texas? State law in this area is primarily focused on liability. Drivers must carry insurance that covers bodily injuries and property damage from an accident in which they are at fault. In addition to covering medical bills and funeral costs, this insurance covers both lost wages; and pain and suffering. Mandatory insurance coverage in Texas does not include insurance covering a driver’s injuries or property damage.

What Are State-Mandated Car Insurance Limits?

Under Texas law, drivers must carry insurance coverage with minimum limits on the amount the provider will pay for a claim. Each state sets different coverage limits for property damage and bodily injury, with the latter being divided into per-person and per-accident limits. In Texas, those limits are:

• $30,000 in bodily injury coverage per person
• $60,000 in bodily injury coverage per accident
• $25,000 in property damage coverage per accident

Texas insurance and legal professionals refer to this as 30/20/25 coverage, which happens to be around the average compared to other states. While this level of coverage will keep you in good standing with the law, most insurance and legal professionals recommend additional coverage beyond the legal minimum. This is because medical bills and property damage in a serious accident can easily surpass these numbers, and drivers are responsible for covering any costs beyond the coverage limits.

With respect to bodily injury, it’s important to note that per-accident coverage doesn’t provide backup coverage when an individual’s injuries go beyond the per-person limit. For example, if one person in an accident has medical bills of $35,000 and another person has bills of $5,000, an at-fault driver will have to pay $5,000 out of pocket even though the total didn’t surpass the per-accident limit.

Types of Insurance Coverage in Texas

Mandatory insurance coverage in Texas does not include coverage for a driver’s own property or bodily injury; however, auto lenders typically make it mandatory for drivers to carry additional coverage. It’s also a good idea to carry coverage on top of the mandatory insurance coverage in Texas to be reasonably protected. If you are worried about paying high premiums, it’s possible to shop around for cost-effective coverage.

There are a lot of insurance options out there, and it’s a good idea to understand the different types of coverage.

• Liability. As we discussed above, liability coverage is the sole focus of mandatory insurance coverage in Texas. An at-fault driver carrying liability coverage will use it to cover the costs of medical bills, vehicle repairs, lost wages, and other damages for other people involved in the accident.
• Collision. When you finance a new car or enter into a lease, auto lenders typically require you to purchase collision coverage, which covers any damage to your car. In the event that damages are greater than the cost of the car, a collision policy will pay out the car’s actual value or a lesser amount listed on the insurance declaration page.
• Comprehensive. Also made mandatory by most auto lenders, this type of insurance covers the cost of repairs to a vehicle that isn’t associated with an accident, such as incidents involving theft or vandalism.
• Uninsured/underinsured motorist. Sadly, there are many people on the road who ignore the requirements for mandatory insurance coverage in Texas. Uninsured/underinsured motorist coverage protects you in an accident caused by one of these scofflaw drivers, and it covers both property and bodily injury damage.
• Loan/lease payoff. Also referred to as gap coverage, this kind of policy covers the difference between what’s owed on a loan or lease and the car’s determined value. This type of coverage comes in handy if the car significantly depreciates in value.
• Medical payment. This type of coverage can be used to pay for medical bills related to an accident, regardless of who was at fault.
• Rental car. Many people pick up rental car coverage as a way to ensure they can still get around in the event of an accident.
• Roadside assistance. This kind of coverage can be used in the event of a breakdown. It covers both roadside repairs and towing.
• Personal injury protection. While liability coverage is focused on paying the costs of other people involved in an accident that you caused, personal injury protection (PIP) coverage pays for your own medical bills, any lost wages, and other costs related to the accident. Auto policies in Texas include this by default, but it can be waived. However, doing so can put you at significant financial risk.

You may be able to find other types of insurance coverage, and it’s a good idea to understand what else is out there, especially if you have a unique transportation or financial situation.

Contact Nix Patterson for Guidance

If you’ve recently been in an accident in Texas or know someone who has, it’s a good idea to get a sense of the state’s mandatory insurance coverage. At Nix Patterson, we have boots on the ground in Texas, and we’re well-versed in the state’s insurance laws.

Get in touch with Nix Patterson today to discuss your car or truck accident case. Our personal injury attorneys work on a contingency fee basis, meaning you don’t pay any upfront fees or costs. Get started now to find out how we can help.