Personal Automobile Policies in Texas

When you are involved in an automobile accident, do you know what your insurance policy says? For many years, Texas had a "standard Texas Personal Automobile policy" which for the most part was written by the State Board of Insurance. As a result, the kind of coverage available to you was relatively easy to determine. However, recently, the Texas Legislature allowed the insurance companies to write their own policies, making it very important that you carefully review the terms of your policy with your agent.

If you are injured in an accident, before you worry about whether it was someone else's fault, you should look to your own policy. What coverages did you purchase? What coverages were available to you? The answers below are generally correct but you will need to check and see the actual terms of your policy.

PROPERTY DAMAGE
If your car is financed, it is almost certain that you have coverage for your own property damages. Usually, you will have a deductible amount (an amount which you must pay out of your own pocket before the insurance kicks in) and then you will have coverage for your automobile. Your own insurance company is obligated to pay either the cost to repair your vehicle, or in the event your vehicle is totally destroyed, then pay you the "fair market value" of your vehicle. In either case, you are rarely fully compensated. Occasionally, your own insurance company will tell you that since the accident was caused by another insured driver, that you must look to their insurance company to have your car repaired or replaced. This is not true. While this may be more efficient, if the other company delays in any way, it could lead to real inconvenience for you. You have the right to make your company pay and then allow them to recover from the other insurance company.

PERSONAL INJURY PROTECTION
Under Texas law, unless you specifically revoke this coverage in writing, you will have Personal Injury Protection (PIP) coverage. This coverage will pay you 100% of your medical expenses and 80% of your lost wages, up to the policy limit. The policy limit is usually $2,500.00 but may go as high as $10,000.00 if you have purchased limits that high. This money is available to you regardless of what other insurance coverage you may have and does not have to be paid back to the insurance company if you recover from a third party. Almost any type of accident that may happen as a result of an automobile is covered under this protection. Collecting PIP benefits will not affect your insurance rates.

MEDICAL PAYMENTS COVERAGE
Some agents substitute Med Pay for PIP coverage. It is generally cheaper and only covers medical bills. Unlike PIP, if you recover from a third party, Med Pay must be paid back.

UNINSURED/UNDERINSURED MOTORIST COVERAGE
This is another coverage which you get automatically with your automobile policy unless you specifically reject it in writing. This is a coverage which pays in the event you are injured in an accident by the driver of a car who either has no insurance or does not have adequate limits to cover your injuries. This coverage pays, only if the other driver is at fault. You have to prove your case against that driver, even though your own insurance company is the party against who you are bringing the claim. You must establish liability on the other driver and your own damages, just like a regular lawsuit. There is coverage for your vehicle damage in the event you do not carry property damage insurance, but there is a pretty high deductible.

You may purchase UM/UIM limits which are as high as your liability limits. This is a good insurance buy and provides you significant protection in a state where statistics show that one in four drivers are uninsured.

LIABILITY COVERAGE
What if the accident is my fault? Your insurance company is required to defend you in any lawsuit and pay damages up to the amount of your liability limits in the event you are involved in an accident and someone claims that it was your fault. You have the obligation to assist in the defense of the claim by making yourself reasonably available and telling the truth about the circumstances of the accident. Your company has the obligation to represent you in a reasonable fashion, advise you of the first offer to settle the claim, advise you when the claim is finally settled, and to not put their interests above yours in trying to get the case resolved.

You should remember that the most expensive insurance which you can purchase the first $20,000.00 of coverage, or your "minimum limits." You will find that raising your policy limits to a much higher level is remarkably inexpensive and you should consider this option. Also, you can have Uninsured/Underinsured Motorist Coverage limits as high as your liability limits. This provides a lot of protection at little cost to you.

This is by no means a comprehensive review of the standard Texas Personal Automobile Policy. There are any number of exclusions and endorsements which apply to every policy and which may change or alter the manner in which the coverage will apply to your personal situation. In the event you have any questions in this area, please feel free to call us for a personal consultation. There is no charge for an initial consultation. Call us at (325) 653-6866 or 1-800-727-4529.