Understanding Auto Insurance

Liability insurance is the most basic type of insurance, and it's required in the state of Texas. If you caused the wreck, the liability insurance pay for the OTHER person’s medical injuries up to the stated policy limits, and also pays for the OTHER person’s property damage.  It does not pay for injuries to you or your property. 

When people purchase car insurance, they buy a policy that pays up to a certain dollar amount for different types of damages. Texas law states that drivers must carry a minimum of $30,000 in bodily injury liability, with $60,000 in bodily injury liability per accident, and $25,000 in property damage liability insurance. Some drivers elect to carry more coverage if they have significant assets or earnings to protect.  This insurance pays others if you injure them due to your negligence.

Uninsured motorists' is a type of voluntary coverage that you can elect to add to your auto insurance policy that protects you in the event that you're involved in an accident with an uninsured driver. Uninsured motorists' insurance has policy limits similar to a conventional plan, and you must elect the amount of the limits. This type of coverage pays for YOUR injuries or property damage if you are injured by an uninsured motorist.  You have to specifically reject this coverage in Texas; otherwise, it is part of the traditional automobile insurance policy.

Underinsured motorist coverage (UIM) is protects you if you are injured by a driver who only carries minimum policy limits and your damages exceed that amount.  Then you can make a claim under your underinsured motorist coverage part of the insurance policy asking your insurance company to pay for your damages in excess of the at-fault driver’s insurance policy limits.  Just like UM coverage, you have to specifically reject it in Texas or it is a part of your car insurance policy.

Generally, this type of coverage is intended to pay you for the value of your vehicle if it is damaged.  This can include damage to your car even if you are fault for the damage, damage to your car if you hit an object, or damage to your car if someone else hits you and they do not have liability insurance.   

Personal Injury Protection coverage pay for you and your passengers if your car wreck results in injuries, no matter who is at fault.  It covers reasonable medical costs and lost wages.  Just like UM/UIM, unless you reject this coverage, it is included in a Texas automobile policy.