As you shop around for car insurance, you may be wondering how much you actually need. Agents will throw around terms you do not understand or may not think apply to you. All you are trying to do is get the best deal possible without sacrificing coverage.
The answer to the question depends on how you interpret it. The state of Texas mandates a minimum amount you must purchase in order to drive legally. However, this amount is usually not enough to cover what you need in an accident.
Texas requirements for auto insurance
The state only requires that you have 30/60/25 liability coverage. Liability means you will have to pay for vehicular damage and medical expenses of the other party if you cause an accident. The numbers mean that you need $30,000 of coverage per person for injuries, with a max of $60,000. You will also be responsible for up to $25,000 in property damage. These numbers may sound like a lot, but in a severe collision or one that involves multiple vehicles, it may only scratch the surface.
You will have to buy a collision and comprehensive policy if you are still paying the loan on your car. This coverage pays for the damage to your own car due to a crash or other cause, such as theft or weather conditions.
The problem with only getting the minimum is that you put yourself at a high financial risk. This is true not only if you cause an accident but also if someone else does. Others are also likely to go with the minimum, or none at all. That leaves you responsible for coming up with the rest of the money to pay for repairs and health care bills.
You need additional policies, such as the following, for maximum protection:
- Uninsured/underinsured motorist coverage
- Rental reimbursement
- Medical payments for you (including as a pedestrian, cyclist or passenger in another car) and passengers in your car
It may cost more now but will save you loss and hassle in the future.