Texas auto insurance requirements: How much car insurance is enough?

April 28, 2023

Is the minimum car insurance required by Texas really enough? 

Man taking a photo of car accident

Let's face it - shopping for car insurance can lead to a lot of questions - question you'll want to answer before you find yourself on either side of an accident! 

What are the minimum auto insurance requirements here in Texas? Is the minimum coverage really enough? Do you go with the minimum required coverage, opt for full coverage, or something in between?  If you've ever found yourself asking questions like these, then you're not alone! 

Whether you're looking to renew your existing car insurance or purchasing car insurance for the first time, evaluating your coverage and coverage amounts is an important decision. That's why today, we'll review the Texas auto insurance requirements, outline the additional coverages available, and help you answer perhaps the most important question: How much car is enough? Read on!

Texas auto insurance requirements: 30/60/25

Like most states, Texas has laws that mandate minimum liability insurance coverages for car insurance. In Texas, this is what is known as 30/60/25 coverage. This means you are required to have:
  • $30,000 in bodily injury per person
  • $60,000 in bodily injury per accident
  • $25,000 in property damage per accident
Bodily injury covers the medical expenses and compensation for lost wages or income following an accident. Texas is an at-fault state, or tort state, which means that the at-fault party is responsible for covering these medical expenses arising from an accident. 38 states are at-fault states while the other 12 are "no-fault states."
But no matter which state you're in, the at-fault party is responsible for carrying insurance to cover property damage (with the exception of New Hampshire).

Texas law also requires that every insurance provider offer the minimum $2,500 in Personal Injury Protection (PIP). PIP covers your own medical expenses after an accident, regardless of who is at fault. This is automatically added to any policy unless you specifically request otherwise and sign a waiver. 

Both property and injury liability coverages are mandatory in Texas - and that's a good thing for several reasons! First and foremost, it's good to know that, should you find yourself on the receiving end of an accident, the law requires the at-fault party to have insurance to cover the damages. If you are at fault, having insurance can help protect you from having to take on the financial burden associated with an accident.

However, as we will soon discuss, the bare minimum requirements may not be enough coverage.

Recommended auto insurance coverage in Texas

Is the minimum coverage enough?

While minimum liability auto insurance coverage is required in Texas, it may not always be enough. Auto repair costs, inflation, and medical costs have increased significantly in recent years, making accidents more expensive. In the event of an accident, the minimum liability coverage may not be sufficient to cover all the costs, leaving drivers with significant out-of-pocket expenses. This can include costs for property damage, medical bills, and lost wages, among other things. As such, it is important for drivers to consider obtaining additional coverage beyond the minimum required by law to ensure they are adequately protected in case of an accident.

Furthermore, if a driver is found to be at fault in an accident and their insurance coverage does not fully cover the damages and injuries, they can be held personally responsible for the remaining costs. This can result in lawsuits, wage garnishment, and other financial repercussions. In short, while minimum liability coverage may seem like a cost-saving measure, it can end up being more expensive in the long run if an accident occurs.

How much car insurance is enough?

So, what is the recommended auto insurance coverage in Texas and how much liability coverage should you have? This is a question that you will have to discuss with your insurance agent as it will depend on your personal financial situation. 

Generally speaking, it is recommended that you carry an amount of liability insurance equal to your net worth, or the total value of your assets. Even though minimum is all that is required to legally drive, accidents can get expensive, especially if there are injuries and/or lawsuits that follow. If any expense exceeds the limits of your liability insurance, you would be held personally responsible. 

Of course, increasing the limits of your coverage will increase your auto insurance premium, so discussing costs with your agent will help you determine what coverage amount both meets your needs and fits within your budget. They can also help you explore any discount options that might be available to help reduce costs. 

It's also worth noting that there are upper limits to the amount of auto liability insurance carriers offer. If after further investigation you determine that you need still more coverage, other options, such as umbrella insurance, are available.

Additional coverages

Beyond increasing the limits of your liability insurance, there are other additional coverage options you may consider and even find necessary. Let's take a look!

Underinsured/Uninsured motorist coverage in Texas

Underinsured or uninsured motorist coverage offers additional protection if you are in an accident and the responsible party either does not have insurance or does not have enough insurance to cover the resulting expenses. While they may be required to cover the difference, they may not always have the resources on hand when you need it.  This coverage can also be valuable if you're the victim of a hit-and-run situation where the at-fault party flees the scene.

It's important to note that underinsured/uninsured motorist coverage comes with a deductible, which is the portion of the accident you are responsible for paying as outlined by your policy. It also has a limit, which is the maximum amount that an insurance provider will pay toward a specific claim.

Lastly, according to the Texas Department of Insurance, uninsured motorist coverage will not pay for damages caused by a hit-and-run accident if you do not file a police report immediately after the incident.

Is uninsured motorist coverage required in Texas?

In Texas, insurance providers are required to offer you some amount of underinsured/uninsured motorist coverage unless you reject it in writing. You are not required to carry it and may reject it, but for the reasons mentioned above, it's a very beneficial coverage to have.

Collision coverage 

At a glance, "collision" insurance might sound like something that would be required. So, is collision insurance required in Texas? No, it isn't required, but many find it to be a valuable and necessary addition to their basic auto insurance.

Collision insurance is the other side of the insurance coin from liability. Liability pays for damage to other property for which you are responsible, but it does not cover your vehicle. Collision pays to repair your vehicle following a covered collision with another vehicle, a stationary object (like a tree), or single-car incidents (like rolling a car). So, while not required, it's definitely helpful for many people.

Like uninsured motorist coverage, collision coverage also has a deductible.

Comprehensive, or other than collision (OTC) coverage

Comprehensive coverage, also known as OTC (other than collision), is just that - coverage for causes of damage other than collisions. This can include fire, hail, water, wind, vandalism, theft, and so on. The specific perils covered by your policy may vary depending on your insurance provider, so always check before assuming. Comprehensive coverage, like collision and uninsured motorist, has a deductible outlined in the policy. 

What is considered full coverage?

Having "full coverage car insurance" refers to a policy that includes the mandatory liability coverage plus personal injury protection, uninsured motorist, collision, and comprehensive coverage.

Should you purchase comprehensive, collision, or uninsured motorist coverage?

As with many things, the answer depends on your situation and specific needs, especially as it pertains to your vehicle. For example, if you still owe money on a car loan used to purchase your vehicle, you will be required to carry all of the above by the lender. However, if you own your car outright, the choice is yours. 

When making that choice, it's important to consider the cost of replacing or repairing your vehicle and whether or not you could afford to pay that cost out of pocket. Many cars, especially newer models, can be quite expensive to repair or replace, especially as the price of parts and labor have increased significantly in recent years. Repair costs can often be surprising, even if the accident was only a fender bender, so, if you haven't had to take your car in for repairs or purchase a new vehicle in a while, make sure to look a little further into the potential costs.

Last but certainly not least, you'll want to speak to an agent. Whether your car is new, old, or somewhere in between, your agent will discuss your specific needs with you and help you understand what each of these coverages may cost and whether it's right for you.

Penalties for driving without insurance in Texas

Driving without insurance in Texas is a serious offense (as it is in most states), the punishment for which can include fines, suspensions, and even jail time. 

First offense. In Texas, driving without insurance carries a fine of up to $350 and no less than $175 for first-time offenders. The driver may also be required to file an SR-22 form, which verifies that you carry the state-required minimum liability coverage. It's worth noting that, should you get a ticket for driving without insurance, this may raise the cost of your car insurance.  

Second offense, subsequent. Driving without insurance can result in harsher penalties if it happens again with fines from $350 to $1,000. Additionally, your vehicle could be impounded for 180 days or until you go through the process of proving financial responsibility.  

Offense(s) involving a collision. If you cause an accident while driving without insurance, you can be held financially responsible for 100% of the damages, including damage to physical property and medical expenses for any injuries. This is in addition to the $175-$350 fine and 180-day vehicle impoundment.

Additionally, you will have your vehicle registration and license suspended for up to two years and must show proof of financial responsibility through the SR-22 form filing for three years. 

For the second and subsequent convictions involving a collision, the same penalties apply yet again and the fine is raised to $350-$1,000. 

Any collisions you are responsible for while driving without insurance that result in serious injury or death could lead to a fine up to $4,000 and possibly even a jail sentence, depending on the severity. 

Do you need insurance for an inspection in Texas?

Yes, proof of insurance is one of the documents required to be presented at the time of inspection in Texas. Vehicle owners are also required to have their registration and inspection sticker up to date, and their vehicle must pass a safety inspection, including checks on brakes, lights, tires, and emissions. Without proof of insurance, the vehicle will not pass inspection, and the owner will be unable to renew their registration until they have obtained insurance.

How much is car insurance in Texas?

Car insurance costs vary tremendously and for good reason: everyone is different, has a different history, and drives a different car. Someone who has an expensive car is likely going to pay more than someone who has a less-expensive car, all else being equal. 

Auto insurance providers set rates based on a number of different factors, such as your driving history, location, age, claims history, and so on. Additionally, the amount of coverage and coverage types you choose will influence the final cost of your car insurance, or your premium. 

It's also important to keep in mind that larger economic forces can affect car insurance costs (like most things). Inflation, supply chain problems, increasing part costs, and increasing medical costs are all contributing to rising auto insurance costs across the country. 

The best way to figure out how much car insurance costs for YOU is to speak with a local agent and get a quote. They'll be able to walk through the process with you, understand your needs, explain coverages, and collect the relevant details to give you an accurate quote. 

Image representing levels of car insurance coverage

Whether you just need the minimum car insurance or full coverage, Germania has you covered! Request a free quote online or reach out to your local agent today

by Geoff Ullrich

About the Author

Geoff Ullrich is a writer and Content Marketing Strategist at Germania Insurance.

What do you want to read more about? For suggestions, questions, or content-related inquiries, contact us at content@germaniainsurance.com!

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