Auto Insurance Requirements in Texas
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In the state of Texas, all drivers must pay for any damages or medical injuries they cause in an accident. The most common way to fulfill that financial responsibility in Texas is with auto insurance, where drivers pay a small premium in exchange for a greater amount of liability protection. There are alternatives, where Texans can get a certificate of insurance to fulfill the legal requirement, including depositing cash with the state or creating a surety bond.
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Texans must present a valid driver's license and proof of their financial responsibility when approached by a police officer at a traffic stop or when in an accident. Even though the TexasSure database was implemented to make insurance, VINs (vehicle identification numbers) and license plates accessible on the go, it's still best to keep your proof on hand. All auto insurance providers licensed in Texas are obligated to mail insured drivers their insurance card and include a copy of the Consumer Bill of Rights for Personal Automobile Insurance.
Texas required car insurance coverage
Minimum liability limits | |
|---|---|
| $30,000 per person/$60,000 per accident | |
| $25,000 per accident |
Texas car liability insurance requirements and minimums
The most recommended and common way to satisfy the legal responsibility in Texas is by purchasing an auto insurance policy. While a policy is made up of multiple coverages, the Texas car insurance laws require bodily injury and property damage protection at the very least. Through the policy, your insurance provider in Texas bears the financial burden of paying for the damages you cause — up to the coverage limits per injured person or per accident — when you are at fault for the accident.
Bodily injury (BI): $30,000/person, $60,000/accident
Requirement
- $30,000 per injured person
- $60,000 per accident for two or more injured persons, combined
Covers
- Your personal assets
- Legal fees in the event the other party sues you, up to the stated limit
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Does not cover
- Your own medical bills
Property damage (PD): $25,000/accident
Requirement
- $25,000 per accident
- Higher limits are available but vary by insurer
Covers
- Everything from the other driver's car that's damaged
- Other property that is damaged in the accident (buildings, fences, etc.)
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In addition to the minimum liability insurance, Texas requires all insurance companies to offer optional personal injury protection (PIP) and uninsured/underinsured motorist (UM/UIM) coverage in your policy. These would pay for your own medical bills and subsequent costs in an accident you caused or when a driver who hits you has no insurance or insufficient insurance. Policyholders have the right to reject these extra coverages in writing:
- PIP: Available for up to $2,500 in medical costs for personal injuries sustained by you, the policyholder, per accident.
- UM/UIM: Available with an automatic $250 deductible; pays the medical and property damage costs for you when the at-fault party either doesn't have auto insurance (UM) or doesn't have enough insurance to pay for your damages (UIM). UIM will pay for any damages that the underinsured motorist can't pay for, up to the policy limits you selected. These two types are typically bundled together. Approximately 20% of vehicles in Texas can't be matched to an insurance policy, and when one in every five vehicles on the road are uninsured, the risk of getting into an accident with an uninsured driver gets a little higher, so UM and UIM might be worthwhile protection.
Cheapest companies in Texas for minimum liability
Other types of financial responsibility proof and minimums
Other than an auto liability insurance policy, there are four less common alternatives to prove your responsibility and ability to pay for accidents you cause. Each of these requires a Financial Responsibility Insurance Certificate from the Department of Public Safety (DPS) as proof.
Deposit of cash/security with the comptroller: For the most common alternative among the four, drivers have to set aside $55,000 in either cash or a personal certificate of deposit (CD) with the Texas comptroller. Contact the DPS and request an application, then send the cash or security, along with all of the paperwork, to the comptroller. Once the comptroller's office verifies the deposit, the DPS will issue a certificate to you as your proof. If you cause an accident, you and the other driver will have to settle the payment amount, and it will be deducted from the $55,000 that was set aside. Otherwise, you can take it to court yourself.
Surety bond: This method requires you to find two other people to insure you, through a surety bond, for at least the minimum amounts that Texas requires of a conventional auto insurance policy. The bond serves as a guarantee that these two other individuals will pay in your place if you can't reimburse someone else for their injuries or damage when you're at fault for a car accident. As security for the surety bond, the two individuals have to list their real estate properties in Texas, have the county tax assessor-collector certify that there are no tax liens and get it approved by a judge with the DPS. When the DPS receives all the necessary statements and documents for the surety bond, they will issue you the certificate.
Deposit of cash/cashier's check with your county judge: This is the least accessible option, because very few county judges accept this kind of deposit, according to a customer service analyst at the DPS. You must find the judge for the county where your car is registered and ask whether they are willing to take a $55,000 deposit in either cash or cashier's check. If they accept it, then they will notify the DPS, which will in turn issue you the certificate.
Certificate of self-insurance: The law allows individuals to self-insure, but in practice, this is only allowed for companies. When a company owns and has registered under its name 26 or more cars, it may apply to insure all of its vehicles, as opposed to purchasing a commercial auto policy. The most important requirement is to provide an audited financial statement that shows the company has more than $255,000 of monthly net assets. Other necessary documents include past claims history and claims procedures as a self-insurer (if available), as well as an agreement to pay up to $85,000 per accident. Certificates of self-insurance must be renewed every three years to remain valid.