Texas Car Insurance Laws

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Car insurance laws are an important thing to take into consideration when deciding how much auto insurance you need to carry. Further, car insurance laws can be complicated and, sometimes, hard to decipher – which can be daunting given that drivers who fail to follow the law can face stiff penalties.

As a Texas driver, knowing the laws in your state can help save you time, money and headaches as you get ready to put your vehicle on the road.

Car insurance laws in Texas

According to the Texas Department of Insurance, Texas law requires drivers to obtain liability car insurance, carry proof of that insurance and to show it to a police officer if requested. Lenders will also require collision and comprehensive coverage if you still owe money on the car.

Car insurance laws in Texas include:

  • A driver must obtain and retain liability insurance, carry proof of said insurance, and show proof to a police officer upon request.
  • You must add new teenage drivers to your 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 with injuries or damage over $1000, or if any driver is uninsured. It is always advised to call the police after an accident, to exchange insurance information with the other driver, and to immediately take photos of the accident scene (if it is safe to do so). 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.

Liability insurance in Texas

In Texas, liability insurance is required, which means if you are in a car accident and at fault, you can at least pay to repair the other person’s vehicle and/or bodily injuries.

The minimum liability required is 30/60/25 coverage:

  • Bodily injury liability: $30,000 per person and $60,000 per accident
  • Property damage liability: $25,000 per accident

This is the minimum coverage required, but 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. Unless you have access to a spare car, or the funds to replace your car, then liability insurance is usually not enough coverage for most people. In addition, the minimum liability amounts might not be enough to cover the total costs of other people in an accident (or your own), so additional coverage may be advised.

Is Texas a no-fault state?

Texas is an at-fault accident state. This means drivers must take responsibility and pay for any crash for which they are found to be at fault. 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.

Penalties for driving without insurance in Texas

It’s important that you obtain and keep your car insurance up to date in Texas. You don’t want to get caught without insurance because the penalties are stiff. If you are stopped by a police officer without insurance, you will likely get a ticket and could get a court fine up to $350. If it happens again, you could be fined up to $1000, have your license suspended, be required to file for an SR-22 certificate (a requirement for high-risk drivers), possible suspension of the vehicle’s registration and/or impoundment of the vehicle. High-risk drivers pay higher premiums and often have difficulty finding an insurance company who will cover them.

In addition, 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, rental car fees and face a court case that could end up costing thousands of dollars.

Additional auto insurance coverage options in Texas

There are many other insurance coverage options in Texas that give a driver additional coverage and additional services in the event of an accident. This additional coverage can offer peace of mind and protection of yourself and your personal assets.

Other insurance options include:

  • Collision – This covers damage caused by a collision with another vehicle or object.
  • Comprehensive – This covers damage to your vehicle by non-collision (e.g. theft, vandalism or weather event).
  • Gap Coverage – This covers the difference between what you owe on a loan and the car’s cash value if, for example, you are in an accident and your car is totaled.
  • Personal Injury Protection (PIP) – This covers medical bills for you and your passengers, in addition to lost wages and non-medical costs. All Texas policies include PIP coverage, but it can be dropped by refusing it in writing.
  • Medical Payments – This covers your medical expenses (or while riding in someone else’s car, walking, or biking).
  • Rental Car Reimbursement – Covers the cost of a rental car during the time that your car is being repaired, etc.
  • Roadside Assistance – Provide assistance during a breakdown (e.g. labor to change a flat tire or jump start a dead battery or provides a tow truck).
  • Uninsured/Underinsured Motorist – Covers your injuries if you are harmed by another driver who is not insured, is underinsured or a hit-and-run. All Texas policies have a $250 deductible first.

Frequently asked questions

What is the best car insurance company in Texas?

The best car insurance company in Texas varies depending on what your car insurance needs are. You’ll want to shop around by requesting quotes from multiple companies, looking at discounts and considering ratings from sources like J.D. Power and AM Best.

What is the cheapest car insurance company in Texas?

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.

How much does car insurance cost in Texas?

The average annual cost of car insurance in Texas is $496 for minimum coverage and $1,800 for full coverage. This is almost exactly in line with the U.S. average of $1,738 annually for full coverage.