Texas law requires people who drive in Texas to pay for the accidents they cause. Most drivers do this by buying auto liability insurance. Liability insurance pays to repair or replace the other driver’s car and pays other people’s medical expenses when you are at fault in an accident.
The current minimum liability limits are $30,000 for each injured person, up to a total of $60,000 per accident, and $25,000 for property damage per accident. This basic coverage is called 30/60/25 coverage.
Liability insurance doesn’t pay to repair or replace your car or to treat your injuries. Consider buying other types of coverage – such as medical payments, collision, and comprehensive – to pay for these expenses.
Auto Insurance Coverages
Depending on the types of coverage you have, auto insurance pays for car repair or replacement, medical expenses, rental cars, towing, court costs, and other expenses.
Read your policy carefully because coverages vary. Pay special attention to who is covered under your policy and to the exclusions, which lists the things your policy doesn’t cover.
The front page of your policy – called the declarations or dec page – shows the exact name of your insurance company, your policy number, and the amount of each of your coverages and deductibles and vehicles covered.
Shopping for Auto Insurance
Rates vary among companies, so it pays to shop around. The following tips can help you find the best deal for your money:
- Decide before shopping what coverages you need.
- Consider choosing a higher deductible. Higher deductibles will lower your premium, but you’ll have to pay more out of your own pocket if you have a claim.
- Get price quotes from several companies. Make sure the quotes are for the same coverages.
- When getting a price quote or applying for insurance, answer questions truthfully. Wrong information could result in an incorrect price quote or could lead to a denial or cancellation of coverage.
- Ask your agent if you qualify for any discounts the company offers.
- Review your credit score. Some companies use your credit score when deciding what rate to charge you. It’s a good idea to look at your credit score each year and to correct any errors.
Texas law requires insurance rates to be reasonable, adequate, not discriminatory, and not excessive. Auto insurance companies in Texas set their own rates and file them with TDI for review.
Factors that Affect Your Premium
Companies use a process called underwriting to decide whether to sell you a policy and what rate to charge you. Companies must file their underwriting guidelines with TDI and update them each time they make a change. The factors companies typically use to set premiums include:
- Your age and, for younger drivers, your marital status.
- Your driving record and claims history.
- Where you keep your car.
- Your car’s type.
- Your car’s primary use.
- Your credit score.
- Whether you drove uninsured in Texas