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User's Guide To Texas Car Insurance

Texas Auto Insurance: What You Need To Know


By Ara Rubyan

[Adapted from the Texas Department of Insurance website]

Texas law requires proof of financial responsibility for anyone who drives an automobile in the state. Most Texans choose to purchase liability insurance to meet this requirement.

Liability insurance pays for bodily injury, property damage, and some additional expenses of other drivers, their passengers, and your passengers when you or a driver covered by your policy causes an accident. The minimum liability insurance required by law is $20,000 per injured person, $40,000 for everyone injured in an accident, and $15,000 for property damage per accident. This is commonly called "20/40/15" coverage. Liability insurance does not pay for damage to your own vehicle.

Understanding Rates
Auto insurers evaluate your risk for a claim using your driving record and numerous other factors, including the type of car you drive, the area where you live, your claims history, your credit score, your age, and how you use your car (business, pleasure, or driving to and from work). Your rates are based on your risk for a claim.

Accidents, tickets, or claims can increase your rates. If you have any accidents, tickets, or claims on your record during the past three years, your rates may be higher.

How to Find the Best Price
If you have a good driving record, avoid companies and agents that advertise to high-risk drivers. Their premiums are often higher.

Get quotes from several companies before you buy. Include independent agents in your search. Some agents only represent a single company or company group. Independent agents may represent several companies.
Consider higher deductibles. You can save money on your premiums by increasing your policy deductibles, but you´ll have to pay more out of pocket if you have a claim. You´ll need to have money readily available (personal savings, ability to borrow from relatives or friends, etc.) to pay your out-of-pocket expenses.
Ask your agent about discounts. Discounts vary by company. Some companies may offer discounts if you have multiple policies with the company, have anti-theft devices in your car, or have completed a driver education course. Other



discounts may be available.

Before You Buy a Policy, Remember
In addition to cost, consider other factors, such as the company´s financial strength and complaint history.
Coverages and limits can vary from policy to policy. Ask the agent or company for the exact coverages in the policy you´re considering. Choose a policy with the coverages you need and with limits that will adequately protect your assets.

If you are held liable or legally responsible for an accident, the basic liability limits may not be enough. You may want to consider buying more coverage.

Don´t cancel a policy until you have a new policy in effect.
Answer all questions on the application truthfully. Wrong information could result in an incorrect price quote, or a denial or cancellation of coverage.

Unfair Discrimination
An insurance company cannot deny, refuse to renew, limit or charge more for coverage, or unfairly discriminate because of your race, color, religion, or national origin. A company also may not discriminate because of your age, gender, marital status, geographic location, or disability or partial disability, unless the refusal, limitation, or higher rate is based on sound underwriting or actuarial principles. This means the company must have valid evidence that you present a greater risk for a loss than drivers it is willing to insure.

Having Trouble Finding Insurance
Don´t give up if a company turns you down. Companies have different standards for accepting new customers. Some companies may accept drivers that other companies won´t.

For More Information or Assistance
For answers to general insurance questions or for information on filing an insurance-related complaint, visit our website or call the Consumer Help Line between 8 a.m. and 5 p.m., Central time, Monday-Friday

www.tdi.state.tx.us
1-800-252-3439
463-6515 in Austin
For printed copies of consumer publications, call the 24-hour Publications Order Line

1-800-599-SHOP (7467)
305-7211 in Austin
Help us prevent insurance fraud. To report suspected fraud, call our toll-free Fraud Hot Line

1-888-327-8818




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