Auto insurance is a big industry, and as such, there are numerous different “products,” or coverage options available to you as a consumer. Knowing about each one and their benefits is arming yourself with knowledge; car accidents happen every single day, so it’s best to understand the different types of coverage to make the smartest decision for you and your family.
1. Liability Car Insurance
You’ll see this term commonly thrown into most insurance policies. A lot of companies will use this as a “buzzword,” deterring you from looking further into your contract before you sign it. Beware of the wording. Liability car insurance focuses around covering others that are harmed when you’re at-fault in an accident.
Liability insurance covers you from being responsible for the other driver's medical debt, compensation and any other financial responsibilities that may arise from the accident. When you look to purchase liability insurance, you’ll see breakdowns of the coverage depending on what the scenario calls for, broken down into 25, 50, and 10 (in most cases).
2. Physical Damage Car Insurance
This pertains directly to costs that affect the physical nature of your car. When a tree branch falls and shatters your windshield, or you end up involved in a collision, you need to have solid physical damage car insurance to pay for auto repair costs. Putting your car in the shop can be expensive, and physical damage insurance can also be expensive.
Utilize every method possible to keep the cost of your physical damage insurance down- things like keeping your car in a personal garage, removing hazards in the yard that could potentially damage your vehicle, and keeping proper alarm and lo-jack systems on your car. Theft counts as a reason to file a physical damage claim. These tips not only decrease your insurance premiums but also keep your car safer, which is the entire point.
3. Uninsured and Underinsured Motorist Coverage
Despite the fact that most states in the US require drivers to carry some form of auto insurance, as many as one in every eight drivers are operating without insurance. That being said, some drivers who are carrying the state minimum insurance can be considered underinsured if their coverage isn’t great enough to apply to all damages sustained.
If a driver is underinsured but follows all regulations and state laws, there will be a gray area—the gap in between what you need, and what you get. Underinsured motorist coverage is absolutely crucial, especially when medical bills stack up against you and affect your quality of life.
Minimum Insurance Requirements by Texas Law
In the state of Texas, you’re required by law to carry a minimum amount of liability insurance to comply with statewide regulations. As of January 2018, these include $30,000 in coverage per person for bodily injury, $60,000 of protection per accident for bodily injury, and $25,000 of insurance per accident for property damage. It’s recommended to go for policies that cover at least $100,000 in each category. You don’t know how many people are going to be in a vehicle, how expensive that vehicle is, or what the nature of the accident will be. Ensure that you’re covered so you can drive free and easy. (Please note that the above coverage minimums are subject to change and as listed reflect the law as of January 2018)