Just as in nearly every state in the U.S., individuals driving on public roads in Texas are required by law to maintain at least a minimum level of vehicle liability insurance. Auto liability insurance is what covers “the other guy” in the event of a vehicle accident for which you are deemed responsible. It pays toward repairing/replacing the other driver’s car and also for their injuries resulting from the accident, up to your policy limits.
The minimum liability amounts required in your Texas auto insurance policy are 30/60/25. These numbers express dollar amounts, in thousands, that your insurance company is obligated to pay to third-party drivers suffering losses in accidents that you have caused. They represent the following:
- Up to $30,000 per injured person
- Up to $60,000 total for all injured persons
- Up to $25,000 for damaged property
The above amounts apply to the maximums payable under 30/60/25 liability coverage for any single accident. Bear in mind that these limits are only the minimums required by state law. It’s quite conceivable that damages suffered in an accident could far exceed these minimum amounts, especially if multiple drivers suffer losses due to an accident determined to be your fault. For this reason, many drivers purchase significantly more liability protection than the minimum. This article from CNN Money recommends you consider liability coverage of no less than 100/300/35. Advice found in this article in the Wall Street Journal suggests that you purchase at least enough auto liability protection to equal the amount of your total assets, including:
- Your home(s)
- Your vehicles(s)
- Your savings
- Your investments
Any accident for which you are deemed responsible will have to come out of your own pocket if damages to a third parties exceed the liability amounts of your Texas auto insurance policy. This could be financially devastating, as those suffering losses would likely sue you for any costs over and above what your policy covers. With the cost of medical care, rehabilitation and car repairs/replacements continually escalating, minimum liability amounts in your Texas auto insurance policy could be quickly used up. You may even be on the hook for other persons’ lost wages and pain and suffering. Protecting your assets by increasing coverage amounts is definitely worth considering.
What’s Not Covered?
State mandated auto liability insurance does nothing to pay towards medical treatment for injuries suffered by you or your passengers in an accident for which you’re responsible. It also pays nothing toward the repair or replacement of your vehicle. To receive payment for these losses, you must add additional coverage to your basic liability coverage, such as collision protection and personal injury protection (PIP) or medical payments coverage. Under-insured/uninsured motorist coverage adds protection if you’re a victim of an accident caused by a motorist who’s uninsured, under-insured or by a hit-and-run driver.
If you have minimal assets, state-required minimum liability coverage may be all you need. For most, however, buying as much protection as you can afford is usually the best choice. Keep in mind that affordability will be an issue for those drivers that are considered high risk by insurers. If you have accidents or a DUI in your driving history, have bad credit, or other factors, it’s smart to shop around for the best rates on high risk auto insurance.