Texas law requires all drivers to demonstrate financial responsibility to operate a vehicle. Most drivers do this by maintaining at least minimum liability insurance coverage. Liability insurance covers payments to repair or replace the car of the person you get into an accident with and pays their medical expenses, if applicable when you are at fault in an accident.
Requirements
“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.”[1] This coverage is referred to as the 30/60/25 coverage for short. However, as this is the minimum coverage, these amounts might not be enough to cover all of the costs of the other driver. If you are unable to cover the total amount of the other driver’s damages, they can sue you to ensure total recovery. As a result, it is recommended to obtain insurance coverage greater than the minimum requirements to protect your finances.
Different Types of Coverages
There are seven other types of coverages, aside from the minimum liability coverage, that you can choose to purchase for more protection.
- Collision Coverage: Covers the cost of repairs or replacement for your vehicle.
- Comprehensive Coverage: covers if your vehicle is stolen, burned, flooded, vandalized, or damaged in any other way other than an accident.
- Medical Payments Coverage: covers medical bills for you and any passengers you carry. It also covers if you are injured while in someone else’s car or hurt as a pedestrian or bike rider.
- Personal Injury Protection Coverage: covers your and your passengers’ medical bills, on top of paying “lost wages and other nonmedical costs.”[2]
- Uninsured/ Underinsured Motorist Coverage: This coverage pays if you are hit by someone who does not have insurance or does not have enough to cover the damages to your car and your medical bills. It also covers hit-and-run accidents, and insurance companies are required to offer you this coverage.
- Towing and Labor Coverage: covers towing for your car if it cannot be driven. It also covers roadside assistance services like “changing a flat tire or jump-starting your battery.”[3]
- Rental Reimbursement Coverage: covers your rental car services when your car is stolen or in the repair shop after an accident. Some auto policies also cover taxi rides or car calling services.
How to Provide Proof
Providing proof of financial responsibility is as simple as presenting your proof of insurance card. When you initially purchase insurance, your insurance company is required, by law, to send you an insurance card copy with your policy. You are required to show this card when you are involved in an accident, asked for it by a police officer, get an inspection, renew your driver’s license, and register your car or renew its registration.
Who is Covered?
When purchasing insurance, an important aspect to consider is who you want to be covered under your policy. Only those listed under your policy are financially covered in the event of an accident. With the exception of a legal concept known as “the permissive user doctrine”, if a driver not under your policy causes an accident with your vehicle, you may be held responsible for covering damages out of pocket. This is certainly true if the driver is listed as an “excluded driver”.
Coverage for Rental Cars
In the event that you purchase a new car, “your current insurance will automatically cover it for about 20 days.”[4] After that, it is your responsibility to inform your insurance of your new car to maintain coverage on that vehicle.
When you are driving a rental car, your personal insurance will usually suffice as coverage. However, rental companies also “offer damage waivers and insurance policies.”[5] While it is not insurance, it does ensure that the rental company will not charge you for damages to your rental car.
Coverage for Borrowed Cars
If you cause an accident while driving a borrowed car, the owner of the car is responsible for covering damages. If they do not have insurance or if the amount of insurance they have is not sufficient, your insurance will pay the claims.
International Insurance Coverage
Insurance policies typically only cover accidents that occur within the U.S, and other countries do not recognize American auto insurance policies. If you are driving internationally, it is best to ask your insurance company if they offer coverage or seek coverage in the country you will be driving in.
Penalties
Penalties for driving without auto insurance vary depending on the offense number and if you cause an accident. Texas law requires drivers to always carry proof of insurance and present it when stopped by law enforcement. If you forget your insurance at home, law enforcement may be able to look it up. However, it is hard to prove your vehicle is insured without your insurance card.
Penalties for Getting Caught Driving Uninsured
If you are caught driving without insurance as a first-time offender, you can be charged a fine anywhere from $175 up to $350. After, the charge of failure to provide proof of insurance will go on your record, making it more difficult and expensive to get insurance in the future. Insurance companies regard “motorists driving without liability insurance as high-risk drivers.”[6]
If you are caught driving without auto insurance as a repeat offender, you can be fined anywhere from $350 to $1000 for the ticket and possibly subjected to a “180-day vehicle impoundment.”[7]After 180 days, the driver must provide proof of financial responsibility for their vehicle to be released. On top of the impoundment, impounded cars are “subject to a daily fee of $15, equivalent to $2700 in total.”[8] Repeat offenders are also subject to a suspension of their driver’s license. The suspension duration depends on if the offender has insured their vehicle since the last time they were caught driving uninsured.
Penalties for Causing an Accident Uninsured
Drivers that operate a motor vehicle uninsured and cause an accident are responsible for them and the other person’s car damages and bodily injuries. Uninsured drivers that cause a “collision resulting in death or severe injuries pay $4000 and a one-year jail term.”[9] The state will also suspend that driver’s license and vehicle registration for two years following the collision.
If an uninsured driver is unable to cover the other person’s injuries and car repairs, they are subject to lawsuits. If you delay in completing payment for the agreed amount, the other party can use the judge to force you to pay. The judge can also require you to liquidate your assets and empty your bank accounts.
While obtaining and maintaining auto insurance can be difficult and expensive, the state requires it for good reason. Having an insurance policy can save you from losing all your assets after an unexpected accident and lowers the risk of financial devastation. It also protects you from others who may not have coverage and ensures financial recovery. However, above all and most importantly, it is illegal to not possess proof of financial responsibility for your vehicle. Make sure to follow up with your insurance policy provider yearly to ensure you are still maintaining coverage and have a policy that adequately insures you.
Written by:
Catherine Perez
Law Clerk
WATTS GUERRA LLP
Four Dominion Drive, Bldg. Three, Suite 100
San Antonio, Texas 78257
Phone: (210) 447-0500
Frank Guerra
Board Certified – Personal Injury Law
Texas Board of Legal Specialization
WATTS GUERRA LLP
Four Dominion Drive, Bldg. Three, Suite 100
San Antonio, Texas 78257
Phone: (210) 447-0500
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