Texas Auto Policy Explained

Texas insurance companies use the Texas Personal Automobile Policy which offers eight kinds of coverage to reimburse you for your loss from a vehicle crash. To help you understand what money you may be entitled to, here are the types of coverage:

1. Liability: When the other person is at fault for causing the wreck.
What it pays: Your expenses up to his policy’s dollar limits (a minimum of $25,000.00, and sometimes more, including medical bills, lost wages, pain, and vehicle damage or replacement cost if it is totaled.

Who it covers: You, family members, and someone driving your car with your permission.

Note: Some policies only cover people who are specifically named on the policy. This is especially true for people living in your home. Your policy’s declarations page should list the names of all of the people covered by the policy.

2. Medical Payments Coverage
What it pays: Your medical bills.

Note that any money received will have to be paid back when you recover money from the other driver’s insurance company.

Who it covers: You, your family members, and passengers in your car, regardless of who caused the collision.

3. Personal Injury Protection (PIP) Coverage
What it pays: Medical bills, 80% of lost income and the cost of hiring a caregiver. If you are not employed, costs for maids or other people hired to perform household duties.

Who it covers: You, your family members, and passengers in your car, regardless of who caused the crash.

An insurance company must offer you $2,500 in PIP, and you can buy more. If you don’t want PIP, you must reject it in writing. The insurance company must provide me with a copy of your rejection of PIP or I can obtain these benefits for you.

4. Uninsured/Underinsured Motorist (UM/UIM) Coverage What it pays: Your expenses caused by an uninsured motorist or a motorist who did not have enough insurance to cover your bills, up to your policy’s dollar limits. Uninsured also pays for accidents caused by a hit-and-run driver if you reported the accident promptly to police.

Bodily injury UM/UIM pays without deductibles for medical bills, lost wages, pain and suffering, disfigurement, and permanent or partial disability.
Property damage UM/UIM pays for auto repairs, a rental car, and damage to items in your car. There is an automatic $250 deductible, which means you must pay the first $250 of the repairs yourself.

Who it covers: You, your family members, passengers in your car, and others driving your car with your permission.

Insurers must offer UM/UIM coverage. If you don’t want it, you must reject it in writing (see above).

5. Collision (Damage to Your Car) Coverage
What it pays: The cost of repairing or replacing your car after an accident. Payment is limited to your car’s actual cash value, minus your deductible. Actual cash value is the market value of a car like yours without damages.

Who it covers: You, your family members, passengers in your car, and others driving your car with your permission.

6. Comprehensive (Physical Damage Other than Collision) Coverage
What it pays: The cost of replacing or repairing your car if it is stolen or damaged by fire, vandalism, hail, or a cause other than a collision. Comprehensive coverage also pays for a rental car or other temporary transportation if your car is stolen. Your policy won’t pay for an auto theft unless you report it to police. Payment is limited to your car’s actual cash value, minus your deductible.

7. Towing and Roadside Assistance 
What it pays: Towing charges when your car can’t be driven as well as storage fees at the tow yard. It also pays labor charges, such as changing a tire, at the location where your car became immobile.

8. Rental Reimbursement Coverage
What it pays: A set daily amount for a rental car if your car is stolen or is being repaired because of damage covered by your policy.

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