Common Questions and Guide About Car Insurance Coverage and Limits

insurance adjuster talking with client

How Much Auto Insurance Coverage Should I Have?

Auto insurance offers protection in the event you are involved in an accident and have medical expenses, vehicle damage, or other losses related to the accident. Texas requires automobile owners to purchase at least minimum amounts of liability insurance. But people frequently file claims that exceed the minimum car insurance limits.

If you can’t rely on insurance to cover medical bills, car repair costs, or other expenses after an accident, you may have no option but to pay out-of-pocket. This is why having sufficient insurance coverage is essential.

To learn more about the types and amounts of auto insurance coverage you should carry in Texas, continue reading. Contact Kraft & Associates, P.C., for a free consultation if you need to pursue an insurance claim after an accident caused by another motorist in Dallas. Kraft & Associates, P.C., is an established Dallas law firm with lawyers ready to assist you. We can help you evaluate your options free of charge.

The Importance of Good Car Insurance Coverage

At a minimum, you must carry the state-required amounts of car insurance coverage to drive legally in Texas. If you drive without proper coverage, you could face fines or even lose your license as a result.

Liability insurance covers other people’s car repairs and medical bills if you are at fault in a crash. Without liability insurance, you might be responsible for the full cost of repairs or medical expenses that result from an accident that is your fault.

Other types of insurance, such as personal injury protection (PIP) or uninsured motorist (UM) protection, can cover your own expenses after a wreck. Personal injury protection pays for your medical bills even if you caused the crash.

To protect your health, your finances, and your ability to recover after an accident, it’s important to carry good insurance coverage and to understand the liability limits on the car insurance policies you have.

What Does Car Insurance Cover?

Different kinds of policies provide compensation for different scenarios, though some types of coverage may overlap.

The main types of car insurance in Texas include:

  • Bodily injury liability coverage – Liability insurance is a type of coverage that pays for other people’s expenses if you are at fault for an accident. Bodily injury liability coverage pays for medical expenses for other people’s injuries.
  • Property damage liability coverage – This type of insurance policy covers the repairs or replacement of anyone else’s vehicle or property damaged in a crash in which you are at fault.
  • Personal injury protection (PIP) – PIP insurance covers your medical costs, a portion of your lost wages, and other expenses from accident-related injuries. PIP can also cover the costs for your passengers or others included in your policy. It pays regardless of who was at fault.
  • Medical payments coverage – MedPay is strictly for your medical costs and your passengers’ medical costs, and MedPay providers have the right to request reimbursement for money they gave you if you recover compensation from an accident claim.
  • Uninsured motorist (UM) insurance – UM insurance can pay for your expenses if you are involved in an accident with an uninsured driver or a hit-and-run driver. Uninsured motorist policies are available for both property damage and bodily injury.
  • Underinsured motorist (UIM) insurance – If you are involved in an accident with a driver whose car insurance coverage is insufficient to cover your losses, you may turn to your UIM policy to cover the difference. UIM policies are available for both property damage and bodily injury.
  • Collision coverage – Collision coverage is an optional type of insurance that pays for the cost of your vehicle repair or replacement expenses after a traffic accident, no matter who was at fault. If you financed the purchase of your car and are making car payments, the lender may require you to have collision coverage.
  • Comprehensive coverage – Comprehensive coverage pays for damage to your vehicle caused by anything other than a traffic collision. This includes things like animal collisions, theft, vandalism, falling trees, or extreme weather events.
  • Gap insurance – If you purchased your vehicle with a loan relatively recently, the amount you owe your lender may exceed the actual market value of the car. Gap insurance is used to pay off the difference between what you owe and your car’s true market value if the vehicle is totaled in a crash.
  • Additional types of coverage – You can choose from several other types of optional coverage, including insurance that will pay for things like rental cars or roadside assistance. You may need to purchase collision or comprehensive coverage before you are eligible to add some of these extras to your policy.

Why Minimum Coverage Is Not Good Enough

Under Texas law, drivers who are at fault for accidents are legally responsible for the costs of any resulting damage or injuries.

The Lone Star State requires drivers to carry the following minimum amounts of liability insurance coverage:

  • $30,000 in bodily injury liability coverage per person
  • $60,000 in bodily injury liability coverage per accident
  • $25,000 in property damage liability coverage per accident

These amounts cover other people’s expenses if you are at fault in a crash. PIP and UM/UIM coverage are also automatically added to all insurance policies issued in the state, but it’s possible to decline these in writing.

It may be tempting to save money by skimping on auto insurance, but what happens when your car accident claim exceeds your insurance limits? If neither your policy nor the other driver’s policy can cover certain expenses related to a crash, you may be forced to pay out of your own pocket.

Having the minimum amount of insurance coverage is certainly better than having no auto insurance. But it’s preferable to have more insurance protection than the minimum required amounts. It usually doesn’t cost a lot to increase the coverage limits.

Car Insurance Coverage Checklist

You may recognize that the minimum auto insurance requirements in Texas are not enough. But it can be tricky to determine just how much automobile insurance is right for your needs.

Here’s a checklist of things to consider when it’s time to choose your car insurance policy:

  • How much is your vehicle currently worth? How much money, if any, do you still owe on your auto loan?
  • If you sustain injuries or vehicle damage or if you are responsible for someone else’s injuries or damage in an accident, how much can you comfortably afford to spend out of pocket?
  • Does your auto lender have its own coverage requirements that exceed Texas state minimums?
  • Are there any other assets you would like to protect with insurance coverage, such as real estate or personal belongings?

How Much Personal Liability Coverage Do I Need?man standing outside his black car

Texas requires $30,000 per person and $60,000 per accident in bodily injury liability coverage to pay for other people’s injuries after an accident that was your fault. This amount of compensation may be enough to pay for treatment of relatively minor injuries, but it will run out quickly in the event of an accident involving serious injuries.

To protect your finances and others on the road, Texas auto insurers say you should carry at least $100,000 per person and $300,000 per accident in bodily injury liability insurance.

How Much Personal Injury Protection (PIP) Coverage Should I Get?

Texas auto insurers are required to offer you at least $2,500 in PIP coverage when you choose your policy. PIP insurance pays for a range of important costs if you are injured in a crash and is available regardless of who was at fault.

As a result, our attorneys recommend that you purchase as much PIP coverage as your insurance company will allow or as much as you can comfortably afford. You can purchase up to $10,000 in coverage from many insurers.

How Much Uninsured or Underinsured Motorist Coverage Do I Need?

Approximately 12 percent of the cars on the road do not have insurance, according to the Texas Department of Insurance.

If you sustain injuries or property damage in an accident caused by an uninsured driver or a driver with insufficient insurance to cover your losses, then your only option for seeking compensation may be to file a claim against your UM or UIM coverage.

It’s typically wise to purchase as much UM and UIM insurance as you can. At Kraft & Associates, P.C., we recommend at least $100,000 per person and $300,000 per accident in UM and UIM bodily injury coverage. You should also purchase UM and UIM property damage coverage equal to the value of your car.

How Much Property Damage Liability Coverage Do I Need?

Texas requires only $25,000 in property damage liability coverage per accident, but this may not be enough to cover repair costs after a wreck.

We recommend carrying at least $50,000 in property damage liability insurance. This should be enough to cover expenses for most types of vehicles after a crash if you are at fault.

Contact a Dallas Car Accident Attorney Today

If you were injured in a Dallas car accident by another motorist, the car accident attorneys of Kraft & Associates, P.C., are here to help. We are ready to stand up to the insurance companies and demand full compensation to cover all your losses. Call us today at (214) 999-9999 or contact us online to speak with a compassionate lawyer in a free consultation.