Automobile Insurance Made Easy Financial Responsibility Liability Coverage Medical Payments Personal Injury Protection.

You must have at least the minimum amount of liability coverage required by the state’s financial responsibility law. The current minimum liability limits are $25,000 for each injured person, up to a total of $50,000 per accident, and $25,000 for property damage per accident. This basic coverage is called “25/50/25” coverage.

Because of car prices and the high cost of medical care, the minimum amounts might not be enough if you cause an accident. If your liability limits are too low to pay for all of the other driver’s costs, the driver may sue you to collect the difference. To protect yourself financially, consider buying more than the basic limits.Proof of Financial Responsibility   

When you buy an auto policy, your insurance company will send you a proof-of-insurance card. You will need to show proof of insurance when you are asked for it by a law enforcement officer have an accident register your car or renew its registration
obtain or renew your driver’s license get your car inspected.

There are penalties for violating the state’s financial responsibility laws. A first conviction will result in a fine between $175 and $350. Subsequent convictions could result in fines of $350 to $1,000, suspension of your driver’s license, and impoundment of your automobile.

The penalties for violating the state’s financial responsibility laws increase if you don’t have a valid driver’s license to a fine not to exceed $2,000, 180 days in jail, or both. The penalty increases to a fine not to exceed $4,000, one year in jail, or both if you case a car accident that results in serious injury or death.

Auto Insurance Coverages
Automobile insurance pays for damages, injuries, and other losses specifically covered by your policy.
Many insurance companies use the Texas Personal Automobile Policy, a standardized policy form that offers eight types of coverages. Companies may sell alternative policies if the Texas Department of Insurance (TDI) approves them in advance.

Read your policy carefully because coverages can vary by policy and company. Pay special attention to the exclusions section, which lists the things your policy doesn’t cover. The front page of your policy – called the declarations, or “dec,” page – shows the exact name of your insurance company, your policy number, and the amount of each of your coverages and deductibles.

The following summarizes the eight coverages in the Texas Personal Automobile Policy. Although your coverages and policy terms may differ from these, this summary can help you understand various auto insurance coverages and the way they work.

1. Liability Coverage (Basic liability coverage meets the state’s financial responsibility requirement)
Pays: Other people’s expenses for accidents caused by drivers covered by your policy, up to your policy’s dollar limits. These may include the other people’s

medical and funeral costs, lost wages, and compensation for pain and suffering
car repair or replacement costs
auto rental while the other driver’s car is being repaired
punitive damages awarded by a court.
Liability insurance also pays your attorney fees if someone sues you because of the accident and  bail up to $250 if you are arrested.

Covers: You and your family members, “Family members” include anyone living in your home related to you by blood, marriage, or adoption, including your spouse, children, in-laws, adopted children, wards, and foster children. Other people driving your car with your permission, family members attending school away from home, and spouses living elsewhere during a martial separation also might be covered.

You and your family members might be covered when driving someone else’s automobile –  including a rental car – but not a car that you don’t own but have regular access to, such as a  company car.  

Note: Some policies won’t cover other people, including family members, unless they’re  specifically named in the policy. Your policy’s dec page should list the names of all of the people  covered by the policy.

2. Medical Payments Coverage
Pays: Medical and funeral bills resulting from accidents, including those in which the other person  is a pedestrian or bicyclist.
Covers: You, your family members, and passengers in your car, regardless of who caused the  accident.

3. Personal Injury Protection (PIP) Coverage
Pays: Same as medical payments coverage, plus 80 percent of lost income and the cost of hiring a  caregiver for an injured person.
Covers: You, your family members, and passengers in your car, regardless of who caused the  accident.
An insurance company must offer you $2,500 in PIP, but you can buy more. If you don’t want  PIP, you must reject it in writing.

4. Uninsured/Underinsured Motorist (UM/UIM) Coverage
Pays: Your expenses from an accident caused by an uninsured motorist or a motorist who did not  have enough insurance to cover your bills, up to your policy’s dollar limits. Also pays for  accidents caused by a hit-and-run driver if you reported the accident promptly to police.

Bodily injury UM/UIM pays without deductibles for medical bills, lost wages, pain and suffering, disfigurement, and permanent or partial disability.
Property damage UM/UIM pays for auto repairs, a rental car, and damage to items in your car. There is an automatic $250 deductible, which means you must pay the first $250 of the repairs yourself.
Covers: You, your family members, passengers in your car, and others driving your car with your  permission.

Insurers must offer UM/UIM coverage. If you don’t want it, you must reject it in writing.

5. Collision (Damage to Your Car) Coverage
Pays: The cost of repairing or replacing your car after an accident. Payment is limited to your  car’s actual cash value, minus your deductible. Actual cash value is the market value of a car  like yours without damages.

Covers: You, your family members, passengers in your car, and others driving your car with your  permission.

6. Comprehensive (Physical Damage Other than Collision) Coverage
Pays: The cost of replacing or repairing your car if it is stolen or damaged by fire, vandalism, hail,  or a cause other than a collision. Comprehensive coverage also pays for a rental car or other  temporary transportation if your car is stolen. Your policy won’t pay for an auto theft unless you  report it to police. Payment is limited to your car’s actual cash value, minus your deductible.

If you still owe money on your car, your lender will require you to have collision and  comprehensive coverage.

7. Towing and Labor Coverage
Pays: Towing charges when your car can’t be driven. Also pays labor charges, such as changing a  tire, at the location where your car became immobile.

8. Rental Reimbursement Coverage
Pays: A set daily amount for a rental car if your car is stolen or is being repaired because of  damage covered by your policy