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Understanding Auto Insurance Laws in Texas

Texas law requires drivers and car owners to take financial responsibility for accidents they cause. That is why vehicle owners are required to buy auto liability insurance in Texas.

There are mandatory auto insurance laws that exist in the state of Texas. They require vehicle owners to carry the minimum amount of auto liability insurance on every car that they own. In fact registering a vehicle in Texas cannot be completed unless the owner provides proof of insurance.

In addition, there is a tracking system in place called TexasSure - for tracking motorists that do not have auto insurance. In Texas – about 20% of all drivers lack the legally required minimum auto insurance coverage. More on what the Texas vehicle law says is discussed below.

Required minimum auto insurance in Texas

The minimum liability coverage required by Texas Law is:

- $25,000 for bodily injury or death to one person per accident
- $50,000 for bodily injury or death to two or more persons per accident
- $25,000 for destruction to property resulting from the accident.

Instead of having to purchase auto insurance through a company, Texas drivers can also post a financial bond to become self-insured at a cost of $55,000 – and they must own 25 or more cars. But whether it is self-insurance or company auto insurance, proof of insurance must be carried in the vehicle at all times.

Driving Without Proof of Insurance

Being caught without insurance papers in the car can lead to a fine of $175-$350 for a first time offense. The penalties become harsher with the second and third offenses, leading to the suspension of your license with the third offense.

Texas also has very stringent rental car insurance requirements. In fact in Texas, you cannot operate any motor vehicle unless it is insured, including rental cars. These cars must also be covered with the minimum liability insurance required under the state law. Most auto insurance policies include coverage for car rentals. But you must make sure you have one before you take the borrowed vehicle on the road.

Texas Auto Law – a Tort System

The state of Texas follows a Tort System. This means that in the case of an accident, there will be someone from either party who will be held responsible for it. In other words, someone must be found to be the cause or fault of the accident. The person deemed to be the one causing the accident is financially responsible for all damages. These damages will be covered and handled by the faulty driver’s insurance provider.

In the case of an unusual accident where the damage done is so bad it cannot be covered by the state minimum coverage requirements, you could be financially out of luck. This is why your auto insurance provider may advise you to get more coverage than the bare minimums.

Auto insurance policies normally renew each year automatically. If for some reason you cancel or do not pay for your insurance, it is reported to the DMV. There is a new technology program that has been put in motion by the State of Texas. It is now very easy for law enforcement officers to instantly confirm whether a person has car insurance or not.

The harshest penalty for being caught without auto insurance is that your license will be suspended. This is for third time offenders. Usually, you will be given some time to provide proof of insurance coverage when you are caught without any insurance papers. If you do not provide proof by the time specified in any correspondence from the DMV, your license will be suspended.

This is the basic outline of the auto insurance laws in Texas. Liability insurance rules and regulations must be understood and followed by you to remain on the right side of the law.

InTexasAutoInsurance.com is the leading provider of online auto insurance quote comparisons in Texas. In about 7 minutes you can save up to 50% on your Texas liability insurance.