Texas Car Insurance Requirements
Texas law makes it mandatory for drivers to cover the costs of accidents they are liable for. This is known as “financial responsibility.” Texas, like most other states, requires drivers to prove financial responsibility in order to legally register a car and drive on public highways. Drivers in the Lone Star State have an advantage over those in some other states in that they have several different options for meeting their financial responsibility obligations:
- purchase an auto liability policy
- leave a $55,000 deposit in cash, securities, or bond with a county clerk or comptroller
- post a real estate bond with at least two bondholders having real property holdings in Texas
Car dealers have an additional option in that they can self-insure if they are registering more than 25 vehicles. Otherwise their cars are will likely be covered under a broad-based commercial insurance policy. As for the average Texas driver, a car insurance policy is what’s normally used.
All car insurance policies issued in Texas must meet a set of minimum standards. Those standards — also known as liability insurance — are as follows:
- property damage liability – $25,000 per accident
- bodily injury/death liability (one victim) – $30,000 per accident
- bodily injury/death liability (multiple victims) – $60,000 per accident max.
The Texas Department of Insurance strongly encourages drivers to not settle for these minimums. They cite the fact that healthcare costs can exhaust those limits very quickly. If you don’t have enough insurance to pay your liability you will be required to make up the difference from your own resources.
Shopping for Insurance in Texas
As far as shopping for insurance goes, Texas is very helpful in that their Department of Insurance website includes a handy cost comparison chart along with other tools to help you find the best-priced carrier. If you don’t want to avail yourself of those resources you can still shop online, at the office of an independent agent, or by directly contacting insurance companies yourself.
Texas has instituted an electronic reporting system they’ve dubbed “TexasSure”. Under this system insurance companies must electronically notify the state about any changes in auto insurance policies. That means they will know very quickly if you cancel your policy or let it lapse.
If you allow your insurance to lapse, or you’re issued a citation by a police officer for driving without insurance, you’ll have a 20 day window in which to appeal if you can prove you actually did have insurance in force. Otherwise there will be fines to pay, suspensions to endure, and reinstatement fees applied to getting your license and registration back.