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Liability
Coverage Basic liability coverage meets the state’s
financial responsibility requirement.
Pays:
Other people’s expenses for accidents caused by drivers
covered by your policy, up to your policy’s dollar
limits. These may include the other person’s
- medical and
funeral costs, lost wages, and compensation for pain
and suffering
- car repair or
replacement costs
- auto rental while
the other driver’s car is being repaired
- punitive damages
awarded by a court.
Liability insurance
also pays your attorney fees if someone sues you because
of the accident and bail up to 250 if you are arrested.
Covers:
You and your family members. Other people driving your
car with your permission might be covered. You and your
family members might be covered when driving someone
else’s automobile – including a rental car – but not a
car that you don’t own but have regular access to, such
as a company car. Family members attending school away
from home might be covered, as well as a spouse living
elsewhere during a marital separation.
Note:
Some policies won’t cover other people, including family
members, unless they’re specifically named in the
policy. Your policy’s declaration page should list the names of
all of the people covered by the policy.
Who qualifies as a
family member?
Generally, a "family
member" is anyone living in your home related to you by
blood, marriage, or adoption, including your spouse,
children, in-laws, adopted children, wards, and foster
children.
Medical
Payments Coverage
Pays:
Medical and funeral bills resulting from accidents,
including those in which the other person is a
pedestrian or bicyclist.
Covers:
You, your family members, and passengers in your car,
regardless of who caused the accident.
Personal Injury
Protection (PIP) Coverage
: An
automobile insurance coverage. The insurers provide or offer
to provide first party benefits for medical expenses, loss
of income, funeral expenses and similar expenses without
regard to fault .
Personal Injury
Protection (PIP): An automobile
insurance coverage. The insurers
provide or offer to provide first party
benefits for medical expenses, loss of income,
funeral expenses and similar expenses without
regard to fault.
PIP is a coverage
in which the auto insurance company pays, within the
specified limits, the medical, hospital and funeral expenses
of the insured person, people in the insured vehicle and
pedestrians struck by the insured vehicle. PIP is the basic
coverage implemented in no fault automobile insurance
states.
Pays:
Same as medical payments coverage, plus 80 percent of
lost income and the cost of hiring a caregiver for an
injured person.
Covers:
You, your family members, and passengers in your car,
regardless of who caused the accident.
An insurance company
must offer you 2,500 in PIP, but you can buy more. If
you don’t want PIP, you must reject it in writing.
Uninsured/Underinsured Motorist (UM/UIM) Coverage
Pays:
Your expenses from an accident 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.
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. This means you must pay the first
250 of the repairs yourself.
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.
Collision (Damage
to Your Car) Coverage
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.
Comprehensive
(Physical Damage Other than Collision) Coverage
Pays:
The cost of replacing or repairing your car if it is
stolen or damaged by fire, vandalism, hail, or a cause
other than 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.
If you still owe money
on your car, your lender will require you to have
collision and comprehensive coverage.
Towing and Labor
Coverage
Pays:
Towing charges when your car can’t be driven. Also pays
labor charges, such as changing a tire, at the location
where your car became immobile.
Rental
Reimbursement Coverage
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.
Texas takes a reasonable,
modern approach to regulation. A customer service survey
conducted in 2004 by the University of North Texas found
that insurers gave Texas favorable marks in creating a
regulatory environment that makes the insurance industry
want to do business in the state, regulating the industry
fairly and effectively, and supporting an efficient
industry. The survey also showed that insurer perceptions of
the Texas regulatory environment have improved during the
last decade. Regulators and the industry alike believe that
the Texas insurance market is strong and getting stronger
thanks to recent insurance legislation, especially in the
following areas:
Texas law requires people who drive in Texas to be able to
pay for the automobile accidents they cause. Most drivers do
this by buying automobile liability insurance. Liability
insurance pays to repair or replace the other driver’s car
and pays other people’s medical expenses. It does not pay to
repair or replace your car or for your injuries. You must
have at least the minimum amount of liability coverage
required by the state’s financial responsibility law.
The current minimum
liability limits increased on April 1, 2008, to 25,000 for
each injured person, up to a total of 50,000 per accident,
and 25,000 for property damage per accident. This basic
coverage is called “25/50/25” coverage. (The limits prior to
April 1 were 20,000 for each injured person, up to a total
of 40,000 per accident, and 15,000 for property damage per
accident.)
Because of car prices and
the high cost of medical care, the minimum amounts might not
be enough if you cause an accident. If your liability limits
are too low to pay for all of the other driver’s costs, the
driver may sue you to collect the difference. To protect
yourself financially, consider buying more than the basic
limits.
When you buy an auto
policy, your insurance company will send you a
proof-of-insurance card. You will need to show proof of
insurance when you
- are asked for it by a
law enforcement officer
- have an accident
- register your car or
renew its registration
- obtain or renew your
driver’s license
- get your car
inspected.
There are severe penalties
for violating the state’s financial responsibility laws. A
first conviction will result in a fine between 175 and 350.
Subsequent convictions could result in fines of 350 to
1,000, suspension of your driver’s license, and impoundment
of your automobile.
A Texas automobile
insurance policy usually meets the financial responsibility
requirements of other U.S. states and Canada. Mexico,
however, does not recognize U.S. auto liability policies.
Mexican authorities can
hold drivers criminally and financially responsible for any
auto accidents they cause. If you’re in an accident that
results in an injury, police may detain you until they
determine who is at fault. You will have to show that you
either have insurance recognized by the Mexican government
or the financial ability to pay any judgment against you.
Some U.S. companies
provide a free endorsement extending your policy’s coverage
to infrequent trips of up to 10 days and as far as 25 miles
into Mexico. You can buy coverage for longer stays, but it
is usually valid only within 25 miles of the border. In
addition, these endorsements might not meet Mexican legal
requirements. You can buy Mexican liability insurance from
Texas agents who specialize in it.
You may be able to buy a
Mexico "tourist" endorsement for your U.S. policy. This
endorsement extends your liability coverage to pay costs
exceeding a Mexican liability policy’s limits. It covers
trips of any distance and any length of time.
In
an Accident ...
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Move your car, if possible, to
avoid blocking traffic and to
protect it from further damage.
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Call the police if somebody is
injured or killed, if you can’t
move your car, or if the
accident involved a hit-and-run
driver. Your uninsured motorist
coverage pays for a hit-and-run
accident only if you report it
to police.
-
Get the other driver’s name,
address, telephone number,
license plate number, driver’s
license number, and insurance
information. Give the other
driver the same information
about you.
-
Write down the insurance company
name and the policy number
exactly as shown on the other
driver’s proof-of-insurance
card. Insurance companies often
have similar names, so make sure
you get the correct company
name.
-
Get the names, addresses, and
telephone numbers of any
witnesses to the accident.
-
Notify your insurance company as
soon as possible. Your company
probably has a 1-800 number to
report claims. If not, call your
agent. The agent or company will
advise you about seeing an
adjuster and getting repair
estimates. Also, give your agent
or company the names and
addresses of any witnesses and
anyone injured.
-
If you reported your claim by
phone, follow up in writing as
soon as possible to protect your
rights under Texas’ prompt
payment of claims laws.
-
Send the company copies of the
accident report and any legal
papers you receive about the
accident.
-
Cooperate with the company’s
investigation. You might have to
submit a proof-of-loss form or
have a medical examination.
If
the other driver refuses to tell you
the name of his or her insurance
company, get a copy of the police
accident report. The accident report
should list the other driver’s name
and insurance company. If the police
did not investigate the accident,
you can report the driver’s refusal
to police. This could result in a
report identifying the driver’s
insurance company. In addition, the
Texas Department of Public Safety
keeps files of forms – called SR-22s
– that show the insurance companies
of people convicted of DWI or
driving without insurance.
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