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Texas Auto Insurance Requirements
by Doug Cohen

Texas law requires proof of financial responsibility, or car insurance, for anyone who drives an automobile in the State of Texas.  Most Texans choose to purchase liability insurance to meet this requirement even though it is not always cheap, and discount auto insurance can be hard to find.  It is important to have not only because Texas law requires car insurance, but liability insurance pays for bodily injury, property damage, and some additional expenses of other drivers, their passengers, and your passengers when you or a driver covered by your policy causes an accident.

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The current minimum auto insurance liability limits required by Texas law are $20,000 for each injured person, up to a total of $40,000 per accident, and $15,000 for property damage per accident. This basic auto coverage is called 20/40/15 coverage. The minimum limits will increase on April 1, 2008, to $25,000 for each injured person, up to a total of $50,000 per accident, and $25,000 for property damage.

Keep in mind, liability insurance coverage does not pay for damage to your own car.

Understanding Rates

Auto insurance companies evaluate your risk for a claim using your driving record and numerous other factors, including the type of car you drive, the area where you live, your claims history, your credit score, your age, and how you use your car (business, pleasure, or driving to and from work). Your car insurance rates are based on your risk of having a claim.  Accidents, tickets, and claims can all increase your rates. If you have any accidents, tickets, or claims on your record during the past three years, your rates may be higher.

How to Find the Best Price

If you have a good driving record, avoid car insurance companies and agents that advertise to high-risk drivers. Their premiums are often higher.

Get quotes from several car insurance companies before you buy. This is another reason why InstantCarInsurance.com was created, so people could easily compare car insurance company rates, prices, and coverage to help them make more informed decisions.

Consider higher deductibles. One way you can save money on your auto insurance premiums by increasing your policy deductibles, but you´ll have to pay more out of pocket if you do ever have a claim. You'll need to have money readily available (personal savings, ability to borrow from relatives or friends, etc.) to pay your out-of-pocket expenses.

Ask about discounts. Discounts vary by insurance company. Some companies may offer discounts if you have multiple policies with the company like car and home.  Having anti-theft devices in your car, or having completed a driver education course could also yield discounts on your car insurance.  And still other discounts may be available.

Before You Buy a Car Insurance Policy, Remember

In addition to cost, consider other factors, such as the company´s financial strength and complaint history. Cheap car insurance is not always the best car insurance.

Coverages and limits can vary from policy to policy. Ask the car insurance carrier for the exact coverages in the policy you're considering. Choose an auto insurance policy with the coverages you need and with limits that will adequately protect your assets.

If you are held liable or legally responsible for a car accident, the basic liability insurance limits may not be enough. You may want to consider buying more coverage.

Don't cancel your existing car insurance policy until you have a new insurance policy in effect.

Answer all questions on the car insurance application truthfully. Wrong information could result in an incorrect price quote, or a denial, or cancellation of your car insurance coverage.

For More Texas Insurance Information or Assistance

For answers to general Texas insurance questions or for information on filing an insurance-related complaint, visit the Texas Department of Insurance website or call the Consumer Help Line between 8 a.m. and 5 p.m., Central time, Monday through Friday.

463-6515 in Austin

For printed copies of consumer publications, call the 24-hour Publications Order Line

1-800-599-SHOP (7467)
305-7211 in Austin

Help us prevent insurance fraud. To report suspected fraud, call the toll-free Fraud Hot Line


And to report suspected arson or suspicious activity involving fires, call the Texas State Fire Marshal’s 24-hour Arson Hot Line

1-877-4FIRE45 (434-7345)

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