Car Insurance can be complicated to a normal person. All the fancy terms and big words can be very confusing to anyone. Outlined below are important things that everyone should consider when purchasing car insurance. Please take the time to really understand your car insurance policy. Unfortunately, once you are involved in a car wreck, it is too late to try to change your insurance policy.
Why is car insurance important?
Overlooking the obvious fact that it is required to drive with car insurance in Texas, driving a car is probably the most dangerous thing any normal person will do in their daily lives. More importantly, lots of Texans drive illegal without proper car insurance. This can put anyone in a bad situation especially if the car wreck leads to serious injuries.
What kind of car insurance is required?
In Texas, you are required to drive with proper LIABILITY insurance. Liability Insurance is when you are found at fault for a car wreck and are required to cover the damages to the other party. State required minimum liability insurance coverage is $30,000 per person/$60,000 per occurrence for bodily injury, $25,000 for property damage. That is the Texas state required minimum “policy limits.”
What does “policy limits” mean?
When someone is injured, an insurance company is only liable to the injured party for the “policy limits” of the insurance policy. This means no matter how seriously injured the person is, the insurance company will only be held liable for the policy limits.
What does $30,000 per person / $60,000 per occurrence mean?
As already stated, Texas minimum required insurance coverage is $30,000 per person / $60,000 per occurrence. That means a person who is injured is entitled to a maximum $30,000 per car wreck and no matter that number of people, $60,000 is the maximum limit for the whole entire car wreck.
So what happens if an injured person’s medical bills are more than $30,000?
Unfortunately, the insurance company is not required to pay more than the policy limits of the insurance company. The only option the injured person has at this point is to go after the wrong doing party themselves directly.
What do you mean by that?
You always have the option of suing a person directly for causing a car wreck. However, that is more than likely not going to get anywhere. Most people in Texas are what is referred to as “judgment proof.” Texas is an extremely debtor friendly state. That means it is hard to collect any kind of money against a wrongdoing person in court. I have seen millionaires who are still judgment proof for court reasons. People who are injured in a car wreck, their best and quickest avenue to receive money for their injuries is through the insurance company.
Can you have more insurance than the state required minimum?
Yes; however, most Texans do not drive with more than the state required minimum. As mentioned previously, a lot of Texans drive illegally without insurance. The Texans that do drive with proper insurance, most only drive with the state required minimum. As you know, $30,000 does not go a long way with the American medical system, depending on how severe the injuries are.
So is everyone who drives a car in Texas potentially in a dangerous financial situation if they are injured in a car wreck?
Fortunately for everyone, there is a way to protect yourself. Most insurance companies offer “Uninsured and Underinsured Motorist” coverage. The only kinds of insurance companies that do not offer this kind of coverage are very cheap insurance companies. If an insurance company does not offer this kind of coverage, you probably should go somewhere else.
What is “Uninsured and Underinsured Motorist” coverage?
Uninsured and Underinsured Motorist coverage is available when you are involved a car wreck that is NOT your fault. When you are involved in a car wreck, if you are found not at fault for the wreck, then uninsured and underinsured motorist coverage will cover you for your injuries. Uninsured will cover you for the instances where the at fault driver had no insurance to cover you for your injuries. Uninsured motorist coverage will cover you for your injuries that the at fault driver’s insurance was not able to fully cover.
How much Uninsured and Underinsured Motorist coverage can I get?
Standard coverage is generally $30,000 per person / $60,000 per occurrence. Insurance companies will not allow you to have more Uninsured and Underinsured motorist coverage than what your liability insurance coverage is. What this means is you cannot have more coverage for yourself than what you have coverage for others. For example, if your liability insurance coverage is the state minimum required $30,000 per person / $60,000 per occurrence, then your uninsured and underinsured motorist coverage cannot exceed that coverage. If you have more liability coverage than you have the option for more coverage for uninsured and underinsured motorist.
I’ve looked at the cost of uninsured and underinsured coverage. It is expensive. Do I really need this?
YES. I cannot stress the importance of this question. I agree that uninsured and underinsured is not cheap; however, IT IS WORTH IT. As mentioned previously, driving is probably the most dangerous thing any normal person will do. You do not want to risk putting yourself in a really bad financial situation because the other driver lacks the proper insurance coverage.
