Texas Car Insurance Requirements in 2024
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Car insurance costs vary significantly across the United States. But everything is bigger in Texas, including car insurance premiums. With a staggering 37% auto insurance rate increase from 2022 to 2023 — the highest in the nation according to S&P Global Market Intelligence — understanding your insurance needs has never been more crucial.
The recent surge in costs, combined with the Lone Star State’s fault-based insurance system, highlights the importance of having proper Texas car insurance coverage. If you’re the at-fault driver in an accident, you face not just insurance claims but potentially significant lawsuits.
Here’s what you need to know about auto insurance requirements in Texas.
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What Are Texas’ Car Insurance Requirements?
Texas drivers must prove they can pay for damages resulting from an accident they’ve caused. Liability insurance is the most common way drivers meet that requirement.
The Texas Department of Insurance (TDI) mandates a minimum liability coverage of 30/60/25 — that means $30,000 of coverage for injuries per person, a max of $60,000 for injuries per accident, and $25,000 for property damage coverage per accident.
Bodily injury liability coverage
The first part of Texas liability insurance is bodily injury liability coverage. This coverage pays for damages if you’re at fault in an accident that causes injuries to others.
Texas requires auto policies to have a limit of at least $30,000 per person and $60,000 per accident. It helps cover medical expenses for the other driver and their passengers.
Property damage liability insurance
The other half of Texas liability insurance is property damage liability. Your policy must have a minimum limit of $25,000 to meet state requirements.
It can pay for damage you cause to someone else’s property in an accident, such as for repairs to their vehicle, buildings, and other structures.
Are Texas Minimum Car Insurance Requirements Enough?
A minimum-coverage policy isn’t likely to provide enough coverage unless you’re in a minor fender bender. The basic limits could fall short in scenarios like multi-vehicle collisions or if you’re responsible for totaling another driver’s car.
For instance, if you’re in an accident resulting in severe injuries or death, or if another driver sues you for damages beyond your coverage limits, you could be financially vulnerable. Even owners of luxury vehicles could find the minimum requirements for coverage insufficient for repairs or replacements.
The TDI suggests drivers consider higher limits to provide a better financial safety net in the event of a significant accident. But you should also consider optional car insurance coverages in Texas for more protection and peace of mind. We’ll cover these in more detail in the next section.
Optional car insurance coverage in Texas
Many drivers should consider adding additional auto insurance coverage for greater protection. The table below shows the different optional car insurance coverages available to Texas drivers. It also lists what each type covers to help you determine if it’s a good fit for you.
For instance, uninsured/underinsured motorist coverage is one option. In Texas, insurers must offer it when you purchase a policy, though it’s not mandatory. But it’s a good idea, considering 12% of motor vehicles in Texas aren’t covered by an auto insurance policy, according to the TDI.
|What it Pays For
|Damage to your vehicle from a collision, regardless of fault
|Non-collision-related damage to your vehicle, such as theft or natural disasters
|Medical payments coverage
|Medical expenses for you and your passengers after an accident, regardless of fault
|Personal injury protection (PIP)
|Medical bills, lost wages, and caregiver costs, regardless of fault
|Costs from an accident with a driver that has little or no insurance
|Towing and labor
|Towing and roadside incidents like running out of gas or having a flat tire
|Rental car fees while your vehicle is being repaired
As you consider these optional coverages, it’s also important to be aware of specific Texas car insurance laws that could affect your decisions and responsibilities as a driver. Let’s dive into these laws in more detail.
Texas Car Insurance Laws You Should Know About
Car insurance laws are in place to ensure you have adequate protection on the road. It’s crucial for you to understand Texas auto insurance laws to make sure your policy meets the state’s requirements and protects your finances.
Texas Automobile Insurance Plan Association
If you’re struggling to find a car insurance company in Texas to insure you because of a poor driving record or you’re considered “high risk” for other reasons, you have options. If two auto insurers have denied you coverage in the last 60 days, the Texas Automobile Insurance Plan Association (TAIPA) can get you the state-required coverage.
The concept of diminished-value claims means a vehicle’s worth after being repaired is lower than before, even if it’s restored to its pre-accident condition. Drivers in Texas who aren’t at fault for an accident might be able to file a diminished-value claim to recover the difference, but this isn’t guaranteed.
Insurers aren’t obligated to pay for diminished-value claims, but policies and practices can vary between insurance companies, according to the TDI. It’s important to ask your insurance company for more information to determine if your policy includes it.
SR-22 insurance in Texas
High-risk drivers — such as those with suspended licenses, caught driving uninsured, or facing a civil judgment — may need SR-22 insurance. While it isn’t a type of policy in itself, SR-22 is a financial responsibility insurance certificate the state may require to prove you’re maintaining liability insurance.
SR-22 coverage typically comes at a higher cost due to the increased risk of insuring high-risk drivers. Shopping around for coverage can be essential to finding the best deal on Texas car insurance.
Penalties for Driving Without Car Insurance in Texas
Driving uninsured in Texas can lead to severe consequences. State law requires all drivers to purchase a minimum amount of car insurance, and operating a vehicle without proof of insurance or another form of financial responsibility (more on that below) can result in penalties that escalate with repeated offenses.
If you’re caught driving without insurance for the first time, you’re looking at a fine ranging from $175 to $350. The court can lower the fee below $175 if you can show you can’t pay it.
The stakes are higher if you have previous convictions. Fines can increase up to $1,000. You may also lose your license unless you file and maintain proof of financial responsibility, such as with an SR-22.
Other Ways to Prove Financial Responsibility in Texas
“Financial responsibility” is how Texas refers to your ability to cover costs from accidents you may cause. Typically, this is proven with liability insurance, but in Texas, a few alternative methods are available to demonstrate financial responsibility beyond traditional insurance. Here’s how.
In Texas, drivers can make a cash deposit with the county judge as an alternative to traditional insurance. The deposit must be in cash or as a cashier’s check and equal or exceed the state’s minimum liability coverage amounts.
Another option for proving financial responsibility is through a surety bond. This requires you to get a certificate from the Department of Public Safety showing you have a bond on file in an amount that’s at least as much as Texas’ minimum coverage requirements.
Certificate of self-insurance
Being self-insured means you have sufficient resources to cover any liabilities arising from car accidents. A certificate of self-insurance is only available for companies that own and register 26 or more vehicles. You can get it from the Department of Public Safety, and it proves you’re compliant with Texas’ financial responsibility laws.
How Much Does Car Insurance Cost in Texas?
The cost of car insurance in Texas varies based on many factors, including coverage type. Liability insurance — the minimum legal requirement — covers damages to others in an accident you cause. Full-coverage insurance, on the other hand, provides more protection and includes liability along with comprehensive and collision coverage for your vehicle.
On average, liability insurance costs $86 per month, and full coverage averages $183 for Texas drivers, according to our data. Keep in mind that drivers with less-than-perfect records may pay higher rates due to increased risk factors.
The table below lists the seven most affordable car insurance companies in Texas. These rates are based on a clean driving record.
|Texas Farm Bureau
|Redpoint County Mutual
GEICO offers the cheapest average rates in Texas by a sizeable margin, but that doesn’t mean it will necessarily be the cheapest option for everyone. At the end of the day, many factors affect your car insurance rates, which is why it’s especially important to compare personalized quotes from multiple companies before buying your next policy.
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Texas Auto Insurance FAQs
Understanding the essentials of Texas auto insurance is crucial. Here are answers to the most frequently asked questions by Texas drivers when buying a car insurance policy.
Can you own a car without insurance in Texas?
Yes. You can own a car in Texas without having liability insurance. The state doesn’t require auto dealers to verify coverage when purchasing a vehicle. But you must have a policy that meets minimum liability requirements before you can register the vehicle or legally operate it on the road.
Does insurance follow the car or the driver in Texas?
Standard auto insurance policies follow the car, not the driver. In Texas, this means that if you or a family member are driving your insured vehicle, your coverage applies. Additionally, if you give someone permission to drive your car, your policy also covers them.
Do you need collision insurance in Texas?
Not legally. Texas minimum car insurance laws don’t require drivers to have collision insurance. But your lender may mandate full coverage — which includes collision and comprehensive insurance — if you finance or lease a vehicle. And it’s generally a good idea if you own a high-value car that you can’t afford to replace.
How long do you have to insure a car in Texas?
If you already have an insurance policy, your insurer will temporarily cover a new car or replacement vehicle for about 20 days, depending on the company. It’s important to notify your insurer about the new or replacement car as soon as possible to ensure continuous coverage.
Do you need uninsured motorist coverage in Texas?
No. Uninsured motorist coverage isn’t required by law in Texas, but car insurance companies are required to offer it when you buy a policy. You can refuse coverage, but you must do so in writing.
Data scientists at Compare.com analyzed more than 50 million real-time auto insurance rates from more than 75 partner insurance providers to compile the quotes and statistics seen in this article. Compare.com’s auto insurance data includes coverage analysis and details on drivers’ vehicles, driving records, insurance histories, and demographic information. All the quotes listed in this article have been gathered from a combination of real Compare.com quotes and external insurance rate data gathered in collaboration with Quadrant Information Services. Compare.com uses these observations to provide drivers with insight into how auto insurance companies determine their premiums.
- S&P Global Market Intelligence, “US private auto insurance rates see double-digit jump in 2023,” Accessed January 4, 2024.
- NOLO, “Texas Car Accident Laws,” Accessed January 4, 2024.
- Texas Department of Insurance, “Auto insurance guide,” Accessed January 4, 2024.
- Texas Department of Insurance, “Protect against other drivers with uninsured motorist coverage,” Accessed January 4, 2024.
- Texas Automobile Insurance Plan Association, “For Insureds,” Accessed January 4, 2024.
- Texas Department of Insurance, “Commissioner’s Bulletin # B-0027-00,” Accessed January 4, 2024.
- Texas Department of Public Safety, “Financial Responsibility Insurance Certificate (SR-22),” Accessed January 4, 2024.
- Texas Constitution and Statutes, “Transportation Code Title 7. Vehicles and Traffic,” Accessed January 4, 2024.
- Texas Administrative Code, “Title 37 Public Safety and Corrections,” Accessed January 4, 2024.
- Independent Insurance Agents of Texas, “Proof of Financial Responsibility,” Accessed January 4, 2024.
- Texas Department of Motor Vehicles, “Register Your Vehicle,” Accessed January 4, 2024.
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