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Most of the information you get about auto insurance is from talking animals on TV ads, but insurance is serious business. Like most states, Texas requires all drivers to carry a car insurance policy. The point is to make sure you’ll be financially responsible for any damage you cause in a collision. How would feel if someone who was uninsured or underinsured crashed into you, totaling your car, and then said, “Sorry dude. I’d help pay for that, but I’m broke so it’s on you.” The DMV requiring that all motorists have car insurance protects everyone from situations like that. Being an uninsured motorist is also illegal, so take your pick of the numerous auto insurers and insurance coverage plans on the market. 

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Minimum Liability Coverage

Auto insurance isn’t optional. There’s a minimum amount of coverage you have to buy, but anything more is up to you. Texans need at least a “30/60/25” plan that pays for crashes they may cause. It’s also known as liability insurance. Here’s what those liability limits cover:

30,000 – bodily damage per person in a crash

$60,000 – maximum amount your policy will cover for the collision

$25,000 – maximum amount of property damage that will be covered

Liability coverage pays out the minimum amount required by the state in the event of an accident or collision. Any costs outside of what your insurance company covers could be left to the driver to cover.  

Drivers need minimum liability coverage
Zebra insurance isn’t required, but minimum liability is.

Other Types of Auto Insurance

If you can afford a more robust insurance policy, it might be a good idea for you. Most car insurance companies offer the following types of coverage:

Personal Injury Protection – PIP coverage, also known as “no-fault insurance,” is nice to have if you find yourself with a bodily injury from a crash. It doesn’t matter if the collision was your fault or someone else’s. Personal Injury Protection means your insurer will cover medical expenses (possibly including lost wages and funeral costs) for you and your passengers if you file a complaint. One drawback: having PIP may limit your ability to sue someone for damages related to a crash.

PIP insurance covers your medical bills
Don’t get stuck with medical bills you can’t afford.

GAP coverage – Look at the cars around you. There’s a good chance that many of them are not paid off by their owners. Most people get auto loans from banks to buy cars, then pay for them slowly over a few years. But what happens if you experience a crash before the vehicle is paid off? You don’t want to be stuck with the same payments on a car that’s been crushed like a tin can. GAP (Guaranteed Auto Protection) coverage pays for the difference between the vehicle’s actual value and the amount you owe on the loan, which could be a substantial amount. GAP coverage could be a good choice for anyone buying a brand new car and/or putting down a small down payment.

GAP insurance covers what you owe
Don’t go broke paying for a wrecked car.

Comprehensive and Collision Coverage- Most multi-vehicle collisions result in some damage to both vehicles. If you cause a crash, your required liability insurance will cover costs for the driver you hit. If your car is damaged too, you could be out of luck unless you have comprehensive collision insurance. This type of coverage will pay for damages to your own vehicle if you crash into another car or an object. Comprehensive insurance may also help you out with damages caused by other unfortunate events (vandalism, theft, fire, natural disasters, etc.).

comprehensive car insurance covers fire damage
Um, is this covered by my auto insurance company?

Motorist coverage may sound confusing what with all the talk of premiums and damage coverages and different kinds of plans, but it’s really not as tricky as you think! A lot of the major insurers have a step-by-step process that explains exactly what the benefits of each payment coverage plan. Do some research, have a conversation with your parents or an insurance broker, and get driving!