Texas law requires that drivers are able to cater for any damages and injuries from an auto accident they caused. Liability auto insurance coverage helps the at-fault drivers are able to pay medical expenses of the victims as well as to cater for the repair or replacement of the other driver’s car; but it doesn’t cover your injuries or damage to your property. Therefore, while Texas only requires you to have liability insurance, it is critical to have other auto insurance options in order to protect yourself financially. Some of these policies include collision, comprehensive, uninsured/underinsured drivers, as well as towing and labor coverage.

Most people purchase liability insurance just to meet financial responsibility law requirements. Now, if you bought liability insurance just to comply with the law, note that Texas requires that your policy should meet the following minimum limits:

• $30,000 for each injured person
• $60,000 per accident
• $25,000 for property damage per accident

As a driver, your insurer will issue you with a proof-of-insurance card, which is a proof of financial responsibility. You can use the card in various situations, such as when you:

• Have an accident
• Get or renew your driver’s license
• Are asked for it by a police officer
• Register your car or renew its registration

Now, there are penalties that may befall you when you fail to comply with state’s financial responsibility, which are:

• For the first offense, you are charged a fine of about $175 to $350
• For additional offenses, you are charged a fine of $350 to $1,000, your driver’s license is suspended, or your car is placed into an impoundment lot.
• If you are caught violating the financial responsibility law and without a driver’s license, then you are charged a fine of $2,000 maximum fine, or 180 days in jail, or both
• If you caused an accident that led to serious injuries or death, you are charged a fine of $4,000 at maximum, one year in jail, or both.

Know Your Rights

It is important that you read and understand your rights as laid down in the Consumer Bill of Rights for auto insurance. Texas requires that your insurer send you a copy of such with your policy. Read it to understand your rights under Texas law, but if you are not able to understand every clause in the policy, be sure to consult a professional.

Auto coverages vary from company to another. Therefore, it makes sense to shop around. You can find the best auto insurance policy for your money by following these little-known tips.

Know what type of coverage that fits your needs

While auto insurance policy with higher deductibles allows you to pay less in term of premium, should you have a claim, and then you will have to pay more out your own pocket.

Get price quotes from several auto insurance companies

The price quotes should be for the same insurance coverage. In Texas, it is a requirement that you give the correct information when applying for auto insurance. Giving wrong details could lead to denial or cancellation of the coverage.

Review your credit score

This is because, most insurance companies will use your credit scores to decide what rate to charge you. Therefore, it makes sense to review your credit score annually and correct any error.

Buy the coverage from a reputable company

Your insurer must be licensed, have a good financial rating, offer reasonable price and good customer service. Checking their complaint index will help you know how they treat their customers. It is against the law to sell insurance without a license in Texas.

It is advisable to consult a professional whenever you want to buy an auto insurance policy.

What you should know about auto insurance rates

While auto insurance companies set their own rates, they have to file them with Texas Department of Insurance (TDI). The rates should be reasonable, not discriminatory, and adequate, as well as not excessive. Texas law does not require auto insurance companies to get prior approval before using their rates. However, if TDI establish that a company charged excessive rates on their policies, it has the power to make that insurer give refunds.

Various factors can affect your auto insurance premium. Every company that sells auto coverages in Texas is required by the law to file its underwriting guidelines with TDI and should update their policies each time they make a change. These underwriting guidelines help companies decide whether to sell you a policy and at what rate. Some of the factors that these companies will use to set their premiums include:

• The age and marital status
• Your driving record and claims history
• Where you keep your car—whether in the city or rural: People who live in cities get higher premiums because they have more auto thefts and accidents.
• The type of the car you have
• Your car’s primary use
• Your credit score

Getting the right auto insurance starts with knowing coverage requirements in your state. Look for an agent to help you understand the different types of auto insurance policies available in Texas and determine which one that best suit you.