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Regardless of whether you live in a city or in a more rural part of the state, every Texas driver must abide by the state’s car insurance laws in order to operate a vehicle on public roads. Failure to do so can result in severe financial and legal penalties, especially if you’re involved in an accident without insurance. To help you navigate your obligations and options, Bankrate’s insurance editorial team put together this brief overview of Texas insurance laws and regulations.
Car insurance laws in Texas
According to the Texas Department of Insurance, Texas law requires drivers to obtain liability car insurance and carry proof of it to show a police officer if requested.
Car insurance laws in Texas include the following stipulations:
- A driver must obtain and retain at least a minimum liability insurance policy, carry proof of the coverage and be able to provide proof of the policy to a police officer, upon request.
- Eligible teenage drivers in your household must be added to the policy (or face paying back-premiums later, denied claims or even non-renewal of your policy).
- An accident report must be filed with a police officer for any accident you are involved in with injuries or damages exceeding $1,000, or in which any driver is uninsured. It is typically best practice to call the police after an accident, exchange insurance information with the other driver, and immediately take photos of the accident scene (if it is safe to do so) and any damages incurred. If you leave the scene of an accident that has caused damages or injuries, it is considered a “hit-and-run accident” and you could face stiff penalties, including fines and jail time.
- It is illegal to file a fraudulent insurance claim.
If you lease or finance your vehicle, your lender will likely require you to carry full coverage car insurance, including comprehensive and collision insurance.
Liability insurance in Texas
Liability insurance is required in Texas, which means if you are in a car accident and determined to be at fault, you will be responsible for paying for repairs to the other person’s vehicle and/or medical costs associated with bodily injuries.
The minimum liability required is stated as 30/60/25 coverage, which indicates:
- Bodily injury liability: $30,000 per person and $60,000 per accident
- Property damage liability: $25,000 per accident
These minimum coverage types will fulfill your legal obligation to insurance laws in Texas. However, liability alone will not provide money to repair or replace your own vehicle, your own bodily injuries or the funds to rent a car while your vehicle is being repaired. Additionally, liability insurance is usually not enough coverage for most people unless you have access to a spare car or the funds to repair or replace your vehicle out of pocket. The minimum liability amounts also might not be enough to cover the total costs incurred in an at-fault collision, so additional coverage may be advised to limit your financial exposure.
Penalties for driving without insurance in Texas
It is important that you obtain and keep your car insurance up to date in Texas. Driving without valid insurance can result in severe penalties:
- If you are stopped by a police officer and do not have insurance (or are unable to produce proof of insurance), you could get a ticket ranging from $175 to $350 depending on your municipal court. After a conviction for driving without insurance, you’ll also have to pay a $250 surcharge each year for the next three years when you renew your vehicle’s registration.
- A second violation can result in a $350 to $1000 fine, a suspension of your license and registration, an SR-22 certificate (an insurance requirement for high-risk drivers), and the impoundment of your vehicle. High-risk drivers typically pay higher premiums and may have difficulty finding an insurance company who will cover them.
- If you are in an accident without insurance that causes damage or injuries, you could be responsible for paying for the other person’s vehicle damage, medical bills, lost wages and rental car fees out of pocket. You may also face a court case that could end up costing thousands of dollars. Texas and some other states have laws in place to protect against underinsured drivers, but while insurers are required to offer this protection, you may choose to reject it in writing.
Additional auto insurance coverage options in Texas
Many other insurance coverage options in Texas offer additional coverage and services in the event of an accident. This additional coverage can offer peace of mind and protection of yourself and your personal assets.
Other coverage options offered by Texas insurers may include:
- Collision – This covers damage caused by a collision with another vehicle or object (except animals).
- Comprehensive – This covers damage to your vehicle by non-collision (e.g. theft, vandalism, animal collisions or weather events).
- Gap coverage – This covers the difference between what you owe on a loan and the car’s cash value if you are in an accident and your car is totaled or stolen.
- Personal injury protection (PIP) – This compensates for medical bills for you and your passengers, in addition to lost wages and non-medical costs. All Texas policies are required to include PIP coverage as an offering, but it can be dropped by refusing it in writing.
- Medical payments – This covers your incurred medical expenses (or while riding in someone else’s car, walking or biking).
- Rental car reimbursement – This covers the cost of a rental car during the time that your car is being repaired, etc.
- Roadside assistance – This service provides assistance during a breakdown (e.g. labor to change a flat tire or jump start a dead battery or provide a tow truck).
- Uninsured/Underinsured motorist – These coverage types cover your injuries if you are harmed by another driver who is not insured, is underinsured or in cases of a hit-and-run. All Texas policies have a $250 deductible first. This coverage must also be offered by insurers, and can be rejected in writing by the policyholder.
Frequently asked questions
To find the best car insurance company in Texas, you will first need to determine your individual insurance needs. Every company is different, so it is important to request quotes from multiple companies before you choose the right policy for you. When you are shopping around, take into account available discounts, coverage customizations and customer service or financial strength ratings from sources like J.D. Power and AM Best, in addition to conducting a rate comparison.
The cheapest car insurance company in Texas depends on the type of policy you are seeking. Full coverage will cost more than minimum coverage, so it’s worth comparing rates from several companies. Additionally, the cheapest car insurance company may not always be the best option for the cheapest insurance – many companies these days offer discounts you can take advantage of to drive down the price of your premiums.
The cost of your Texas car insurance policy will vary based on several factors including your age, specific location, driving record, insurance history, elected coverage types and your vehicle make and model, among other factors. The average premium for minimum liability insurance in Texas is $691 per year, while the annual average for full coverage is $2,613, according to our 2024 analysis of quoted rates from Quadrant Information Services. To find the best, most affordable policy for your situation, shop around and compare quotes from several different insurers.
Texas is an at-fault or tort state. This means drivers deemed at fault for any collision must take full financial responsibility for paying for damages. After an accident, an injured party can make a “first-party” claim with their own insurance company, a “third-party” claim with the other driver’s insurance company and/or file a personal injury lawsuit in court.