Texas car insurance laws require all drivers who are in the state for at least 30 days to register their vehicle with the state and carry $85,000 in liability insurance to cover other drivers’ losses in the event of an accident. The minimums are $30,000 in bodily injury liability per person, up to a total of $60,000 per accident, and $25,000 in property damage coverage. Texas uses an “at-fault” system, which requires drivers to pay for the accidents they cause. Texas’s state insurance requirements are relatively moderate. Many states–like Florida–require less coverage. Many others–like Maine–require more.
Although Texas law only requires liability insurance, you also need to carry collision and comprehensive insurance if you owe money on your car or are leasing it. Your lender or leasing company requires these coverages in Texas (and elsewhere) to protect their financial interests. Collision coverage will pay to repair or replace your car after a crash. Comprehensive pays if your car is stolen or damaged by wind, fire, flood, vandalism, falling objects, etc.—pretty much anything other than a collision. Other types of coverage such as medical payments, personal injury protection, uninsured/underinsured motorist, and road assistance are optional in Texas.
You must always have your proof-of-insurance card or alternative documentation with you in Texas, in case a police officer asks for it or you’re involved in an accident. You will also need it to register your car, renew your license plate or have your vehicle inspected annually. If you drive without the minimum coverage required by Texas car insurance laws, you could be fined up to $350 for a first offense. For a second offense, fines can reach up to $1,000. Your driver’s license could also be suspended, and your car could be impounded.
You can avoid buying traditional car insurance in Texas by demonstrating financial responsibility in a number of ways. You may deposit $55,000 in cash or securities, or file a surety bond co-signed by two Texas land owners. Those who own more than 25 vehicles can also obtain a certificate of self-insurance and assume responsibility for damages in the event of an accident.
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