Auto insurance is a must if you own a car. Texas requires you to carry auto insurance, and without it, you face financial disaster if you cause a serious accident and get sued.
Car insurance can also pay to repair your vehicle if it gets damaged in a crash or natural disaster, like hail or wildfire, or is vandalized or stolen.
A car insurance policy can include the following types of coverage:
Liability insurance pays for damage to others when you cause an accident. Texas requires you to carry a minimum level of bodily injury liability to others ($30,000 per person and $60,000 per incident) and minimum level of property damage liability to others ($25,000)coverage.
In most cases, the coverage limits are expressed as three numbers. Limits of 30/60/25, for example, would provide up to $30,000 per person injured in an accident, up to $60,000 of coverage for injuries per accident and $25,000 for property damage per accident. Remember, liability insurance pays out to other people; it does not cover you.
Personal injury protection (PIP) or medical payments (MedPay) coverage pays the medical bills for you and your passengers after a car accident. PIP also covers lost wages and funeral costs.
Uninsured motorist (UM) and underinsured motorist (UIM) pays you if you’re hit by a driver who has no insurance or not enough coverage. UM pays your medical bills if you’re injured in an accident caused by an uninsured driver. UIM kicks in if your medical expenses exceed the other driver’s liability coverage limits.
Uninsured motorist property damage (UMPD) covers your car if an uninsured driver hits you.
Collision coverage pays to repair your own vehicle after a crash. It’s an optional form of coverage, although your car-loan lender might require you to have it. Collision will kick in if you hit a tree, for example. Any collision payment will be reduced by the amount of your collision deductible.
Comprehensive coverage pays out if your car is stolen (and not recovered) or damaged by a natural disaster, if you hit an animal or if your car is vandalized. . Like collision, comprehensive is optional, but your lender might require it. Here too, a comprehensive claim payment will be reduced by the amount of your deductible.
Roadside assistance and Rental Reimbursement coverage Roadside assistance covers towing and emergency roadside service when your car breaks down. Rental reimbursement pays for a rental car while your car is in the shop after a covered accident.