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 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.” Insurance protects everyone from situations like that.
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 that covers:
$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
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 injured from a crash. It doesn’t matter if the collision was your fault or someone else’s. Personal Injury Protection will cover medical expenses (possibly including lost wages and funeral costs) for you and your passengers. One drawback: having PIP may limit your ability to sue someone for damages related to a crash.
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.
Comprehensive and Collision – 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.).