How Texas Car Accident Insurance Works

Having car insurance might seem like an inconvenience, but it’s one of the most important things a person can have to protect themselves financially after a car accident. Car insurance helps recover losses and shield a person’s finances from the inflated expenses of a car accident.

However, while everyone should have insurance, they should also be cautious about theirs. The system isn’t perfect, and car insurance companies are always looking for ways to fulfill their legal obligations to the insured while spending as little as possible. This makes understanding how car insurance works in the state of Texas important.

This guide is designed to help you receive the right insurance coverage, understand the laws insurers must follow in Texas, and help protect you from being treated wrong during the claim process.

Texas Car Insurance Coverage Requirements & Fault Laws

Often, drivers are curious whether Texas is a fault or no-fault car insurance state. A minority of states in the country have what is called no-fault car accident laws. These states require drivers to seek compensation from their insurance policy, regardless of who is at fault for the accident. In Texas, drivers enjoy the benefits of having fault insurance. In other words, they’re able to avoid using their insurance policy when they are not at fault for an accident. 

Texas car insurance law mandates how much coverage a person must carry.

A driver needs at least the following amounts of coverage in Texas:

• $30,000 in coverage for each injured person up to $60,000
• $25,000 in liability coverage for property damage

These requirements are commonly referred to as the 30/60/25 rule. 

What Laws Insurers Must Follow in Texas

When a person has paid insurance premiums for years, it’s reasonable for them to expect their insurer to be there for them when needed. However, since insurance companies work to preserve profits, they don’t always act in the interest of the people they’re supposed to help.

When an insurance company fails to provide the service they’re supposed to claimants, they might be committing something known as bad faith. This is illegal. Essentially, bad faith occurs when an insurance company is unfair or unresponsive to a claim. For example, if an insurance company takes too long to reply to a claim, it might be operating in bad faith.

Texas requires car insurances companies to:

• Respond to a claim within 15 days
• Commence an investigation into a claim
• Gather all relevant information with the claim needed to investigate it

When a company isn’t being fair, is taking too long, or is ignoring a claim, it might be using a tactic designed to frustrate a claimant into accepting a low settlement once one is finally offered. If you suspect this is happening, it’s important to get in contact with a Texas bad faith insurance lawyer.

Texas Car Accident Insurance FAQ

Is Texas a no-fault state when it comes to car insurance?

No, Texas is not a no-fault state. It operates under a "fault" system, meaning that the person responsible for causing the accident is also responsible for paying for the resulting damages.

What is uninsured/underinsured motorist coverage, and do I need it in Texas?

Uninsured/underinsured motorist (UM/UIM) coverage is designed to protect you if you are involved in an accident with a driver who doesn't have any car insurance or has insufficient coverage to cover the damages. While it's not required by law in Texas, including UM/UIM coverage in your policy can safeguard you against the financial risks associated with accidents involving underinsured or uninsured drivers. UM/UIM coverage may also kick in if you’re involved in a hit and run accident with a driver who flees the scene.

Will my insurance rates increase if I'm involved in a car accident?

In Texas, your insurance rates may increase after an accident, especially if you are found to be at fault. However, the specific impact on your premiums depends on various factors, such as your driving history, the severity of the accident, and your insurance provider's policies. In some cases, a minor accident with no injuries might not significantly affect your rates.

I was in a car accident, and the other driver was at fault. Can I file a claim with their insurance company?

Yes, if the other driver was at fault, you could file a claim with their insurance company to seek compensation for your damages. This is called a third-party claim. However, navigating the claims process can be complex, and insurance companies often try to minimize payouts. It's essential to consult with an experienced attorney to ensure your rights are protected.

How long do I have to file a car accident insurance claim in Texas?

Generally, there is a 30-day window in which you must report a car accident to your insurance company, but it’s important to check your policy. For filing a personal injury case against an at-fault driver, there is a two-year statute of limitations in Texas. It's important to act promptly, as failing to file a claim within this timeframe can result in losing your right to pursue compensation.

What is Personal Injury Protection (PIP) coverage, and is it required in Texas?

Personal Injury Protection (PIP) is a type of no-fault insurance coverage that helps pay for medical expenses and lost wages resulting from a car accident, regardless of who is at fault. In Texas, insurance companies are required to offer a minimum of $2,500 in PIP coverage, and you have the option to reject it in writing. However, we recommend considering PIP coverage as it can provide valuable financial assistance in the event of an accident.

Can I still recover damages if I was partially at fault for the car accident?

Yes, Texas follows a "modified comparative negligence" rule, which means you can still recover damages if you are found to be partially at fault for an accident. However, your compensation will be reduced by the percentage of fault assigned to you. For example, if you are found to be 30% at fault and your total damages are $100,000, you will receive $70,000 in compensation. It's crucial to note that if you are found to be more than 50% at fault, you are not eligible to recover any damages.

Call Arnold & Itkin today at (888) 493-1629 for a free consultation. We're ready to help you decide if the insurance company is treating you fairly after your accident.