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Do I Need Auto Insurance in Texas?

Every vehicle operating on Texas roads must be insured. Auto insurance is mandatory and obtaining it ensures residents do not get prosecuted for operating vehicles without obtaining the necessary insurance coverage.

The auto insurance obtained guarantees that owners of insured vehicles receive some compensation when a covered loss or damage occurs. This mandate placed on every vehicle operating in the state to be insured does not consequently mean only vehicle owners benefit from obtaining auto insurance.

In contrast, auto insurance benefits to every Texan, including those who do not own vehicles. Many insurers design auto insurance policies that cover non-vehicle owners. One of such policies cover non-vehicle owners involved in accidents caused by uninsured or underinsured drivers. Conclusively, no matter your status, there is an auto insurance policy that suits your needs.

How Does Car Insurance Help me?

One of the many benefits of obtaining auto insurance in Texas is that it helps residents stay within the law and avoid legal prosecution.

According to the Texas Motor Vehicle Safety Responsibility Act, every driver must prove they can shoulder the financial responsibilities arising from any accident they cause. In addition, drivers must also present this proof, upon request, to a peace officer. Obtaining an auto liability insurance policy satisfies the statutes' requirements and serves as proof of financial capability. Once obtained, auto insurance automatically transfers the financial burden of costs incurred during accidents, thefts, or other disasters to the insurer.

Auto insurance liability coverages are not only beneficial to accident victims. Some policies help the insured alleviate the cost of replacing stolen vehicles. Statistics from the Texas Department of Motor Vehicles show that over 65,000 cars and trucks get stolen each year. This is in addition to the almost 200,000 vehicles that get burgled annually in the state. These figures are proof that auto insurance is necessary for Texans. Similarly, some policies help the insured reduce the cost of repairing vehicles damaged by fire, floods, and other disasters.

Texas residents who do not drive nor own vehicles may be asking the "Why do I need auto insurance?" question. Auto insurance has specific policies designed for persons operating borrowed or rented vehicles. There are also liability coverages designed for those Texans who do not drive. Some of these policies provide coverage for individuals involved in accidents where the drivers of the vehicles at fault are uninsured or underinsured. Statistics do show that about 20% of Texas drivers are uninsured.

Do you Need Insurance to Drive a Car in Texas?

Yes, every individual behind the wheel of a vehicle must have an active auto insurance. The insurance policy proves that the driver of the vehicle can cover expenses from any accident they may cause. In some states, persons involved in accidents must file claims with their individual auto insurance carriers to get settlements. However, Texas is an "at-fault" state. This means that the driver that caused the accident must cover the financial burden of everyone involved. Persons involved in such accidents only have to file claims with the driver's insurer that caused the accident.

What Car Insurance Do I Need?

Auto insurance carriers in Texas offer different coverages to suit individual needs. However, the state requires residents to possess policies with a minimum coverage of $30,000 for each injured individual and $60,000, in total, for each accident caused. In addition, every driver must also have an auto insurance policy that provides $25,000 as the minimum coverage for property damages. This minimum requirement is sometimes called the 30/60/25 rule. Often, this minimum coverage is not enough to cover all the expenses incurred during accidents. This situation occurs when a driver causes multiple accidents or causes damage valued above the minimum coverage. Consequently, Texans often take out other auto insurance policies above the stated minimum coverage.

Before obtaining any auto insurance policy, consider the following factors:

  • Texas drivers must understand that Texas laws find every driver liable for all accidents caused. The strict nature of this law mandates drivers to obtain auto insurance liability coverage.

  • Texans must also consider obtaining insurance above the statutory minimum because of the high cost of cars and healthcare. If involved in accidents above the statutory minimum, the driver must be able to cover the difference. Taking out insurance policies with coverage above the 30/60/25 minimums helps drivers avoid significant personal liability of such situations.

  • Drivers must also educate themselves on the different auto insurance policies available to help them decide on a preferred choice. If there are questions, Texas-licensed P&C insurance agents can help with advice and a professional recommendation.

  • The TDI also advises Texans to ensure they make inquiries about insurance policies and prices from different insurance carriers. With this information, residents can make better decisions about the kind of auto insurance policy to obtain.

  • It is also advisable for Texans to critically review and assess the TDI's complaint index before deciding on an insurer. The complaint index is an aggregation of the complaints filed against insurance companies in the state. Any insurer whose complaint index is equal to 1 receives the same number of complaints as the average insurance company. An insurer with a complaint index greater than 1 receives more complaints than the average number. On the other hand, a complaint index lesser than 1 shows that the insurer receives fewer complaints than the average insurance company.

  • Individuals seeking to obtain auto insurance in Texas must decide on the amount they are willing to pay as deductibles. Deductibles are the fees paid by the insured before the insurer fulfills its obligations. Sometimes, the agreed deductible is a fixed amount.

If, for example, the agreed deductible is $700 and the total value of claims is $1500, the insurer only pays $800. Typically, individuals who agree to pay a high deductible have their premium reduced considerably. On the contrary, a low deductible leads to high premium payment.

  • The TDI also advises Texans to ask insurers about possible discounts. Usually, insurers offering discounts on auto insurance policies require prospective policyholders to prove they can minimize loss. Maintaining a good driving record and enrolling in defensive driving training are some of the proof required.

  • After deciding on an insurance company, Texans should run a background check on the chosen insurer and confirm that company's legitimacy. The TDI's company lookup is a quick way of checking the registration status of any insurance company or agent.

  • It is not advisable to cancel one insurance coverage without having another take its place. To avoid being uninsured, obtain a new auto insurance policy before canceling any previous one. Seeking auto insurance coverage can be difficult and time-consuming. Some individuals also get rejected by some insurance companies. Texas laws make provisions for persons rejected twice by Texas-licensed insurers. Texas statutes created the Texas Automobile Insurance Plan Association (TAIPA) to give these individuals the minimum 30/60/25 coverage.

Texans seeking more information on auto insurance should speak with a Texas-licensed insurance professional. An insurance agent can answer your questions and help you select and obtain the auto insurance coverage that will suit your specific needs. For Texas insurance regulatory questions, call (800) 252-3439 from 8 a.m. to 5 p.m. Mondays through Fridays to speak with the TDI staff.

When Do you Need Car Insurance?

You need car insurance any time you operate a vehicle. Auto insurance fulfills the statutory requirement, which states that every driver must have at least the bare minimum of coverage.

When you buy a car, you also need to start paying for its insurance. Many Texas car dealers do not permit buyers without auto insurance to drive off after purchasing new or used vehicles. These buyers must register and insure their cars before it leaves the dealership.

What Kind of Car Insurance Coverage Do I Need?

Texas requires 30/60/25 as the minimum coverage , however, this minimum liability coverage does not offer enough protection in certain situations:

  • With the current cost of cars, the damage to a vehicle can be valued far above the $25,000 coverage offered by the minimum liability coverage. The more vehicles are involved in the accident, the higher the cost to repair.

  • Additionally, the minimum Texas insurance policy does not cover personal belongings lost in the insured vehicle.

  • It also does not cover damages caused to vehicles by natural disasters or any other cause that is not an accident.

  • Similarly, Texans whose vehicles are used for commercial purposes need more than just the minimum liability coverage. The scope of the 30/60/25 coverage is minimal and does not cover vehicles used for commercial purposes.

  • It ís also advisable to obtain auto insurance policies above the required minimum as the 30/60/25 policy does not cover your personal vehicle. It only covers the other driver's liabilities in any accident you cause.

Consequently, many Texans take out additional auto insurance policies far above the required minimum. Generally, the kind of auto insurance coverage obtained depends on the individual's particular needs.

Below is the list of the common Texas auto coverage options:


Personal Injury Protection coverage permits individuals who cause accidents to seek claims covering their medical expenses from their insurers. Texas laws mandate insurance companies to offer every individual the Personal Injury Protection policy, with a $2,500 minimum coverage. However, the law does not make it compulsory for Texans to accept and obtain this offer. Any individual declining the offer must submit a written note formally declining the Personal Injury Protection coverage to the insurance carrier.

The Personal Injury Protection policy covers some of these costs:

  • Medical expenses incurred during the treatment of injuries caused during accidents

  • Cost of transporting the injured to the hospital with an ambulance

  • Wages lost while recuperating from injuries

  • Funeral costs

  • Cost of rehabilitation and therapy


Medical Payments Coverage, sometimes called Med-Pay, is quite similar to the Personal Injury Protection coverage. It covers the medical expenses of the insured and co-passengers regardless of who caused the accident. However, there are slight differences between the two insurance coverage policies:

  • Texas laws do not mandate insurance companies to offer Med-Pay to every prospective client.

  • Med-Pay only covers the medical expenses of the insured and co-passengers. The PIP offers additional protection that covers lost wages and pays for essential services if the insured is unemployed and injured. Such basic PIP services may include childcare and lawn services.

  • Med-Pay's coverage does not extend to chiropractic care. On the other hand, PIP covers chiropractic care, which involves the non-medical treatment of the nervous and spinal system.

Texans covered by Med-Pay do not need to pay deductibles before receiving their claims. Individuals with health insurance are also encouraged to cover their medical expenses from accidents with Med-Pay. When health insurance covers these persons' medical bills, affected individuals can pursue a refund from Med-Pay.


Collision coverage policy also offers protection to the driver that caused the accident. It ensures the insured receives payouts to cover the financial expenses of repairing or replacing the insured vehicle. This policy does not only cover the insured when in accidents with another vehicle in motion. Its scope also extends to collisions with parked vehicles, utility poles, and street signs.

The collision coverage policy is not mandatory for every Texan. However, individuals leasing or financing their vehicles are mainly required to obtain this particular auto insurance policy. Similar to other auto insurance policies, individuals covered by this policy must pay the cost of the agreed deductibles before receiving payments. Usually, the fixed deductible for this policy ranges between $250 and $1,000 per accident.


This auto insurance policy offers additional protection to Texans. While the collision coverage only covers the insured during accidents or collisions, comprehensive insurance covers damages or loss from other causes. Some of the situations covered by the comprehensive car insurance include:

  • Theft

  • Vandalism

  • Natural disasters (including storms, flooding, and hail)

  • Damage caused by lightning strikes or rodents

  • Scratches resulting from vandalism (Collision coverage covers scratches resulting from accidents or collisions)

  • Broken windows and windshields

When insured vehicles get stolen, comprehensive insurance only covers the expenses required to replace the stolen vehicles themselves. It does not cover the possessions lost in the stolen vehicle.


Gap insurance is another coverage that is not mandatory in Texas. It is meant for individuals whose car financing debt is higher than the actual value of the vehicle. This is known as being upside-down. Insurance companies do not pay the price of the car as it was financed. Instead, the insurer pays the car's depreciated retail value at the time of theft or total damage. Gap insurance steps in to help the insured cover the gap between the sum received from the main auto insurance and the balance owed on the stolen or damaged vehicle's financing. Even if the car is stolen or destroyed, you still need to pay off the debt.

Texans with Gap coverage have the option of canceling this policy when their financing or leased sum becomes less than the estimated value of the insured vehicle. A new vehicle loan may take a year or two before it reaches this point.


Commercial auto insurance is suitable for individuals whose vehicles are used for commercial purposes. Commercial auto insurance is for:

  • Persons who use their vehicles to transport other people or goods for a fee

  • Businesses whose employees drive company cars

  • Businesses whose employees use personal cars for official duties

  • Businesses that own, rent, or lease vehicles

NOTE: Commercial auto insurance is purchased through a commercial Property & Casualty (P&C) insurance agent


This auto insurance policy is designed for non-vehicle owners who regularly drive vehicles belonging to persons not part of their household. Persons who drive vehicles belonging to other members of their household do not need to obtain this policy. The vehicle owner only needs to add the non-owner driver to the vehicle's existing policy.

Possessing the non-owner driver car insurance complements the borrowed vehicle's existing coverage. For instance, if Mr X borrows Mr Y's car and causes an accident, the liability is charged on the borrowed vehicle's insurance and not the non-owner driver's policy. However, if the vehicle is uninsured or underinsured, the non-owner insurance policy will cover any liability - bodily injury or property damage - caused by Mr X.

Non-owner car insurance extends to any bodily injury or property damage suffered by the other persons involved. It does not cover the driver's injuries or damages.


This policy covers persons involved in accidents caused by drivers with little or no insurance. With every 5th vehicle on the roads of Texas uninsured, UI/UIM coverage is extremely important. It covers the insured's medical expenses and also the cost of repairing the insured's damaged vehicle.

Uninsured/underinsured motorist coverage also covers the policyholder when they become victims of hit and run accidents. In Texas, insurance carriers must offer prospective clients this coverage policy and uninterested individuals must turn down this coverage in writing.


This coverage only applies when the policyholder seeks the claims of existing auto insurance to repair or replace a damaged or stolen vehicle. The rental reimbursement coverage policy covers expenses spent on car rentals while the insured's vehicle is being fully repaired or replaced. Usually, there is a limit placed on this coverage policy. Many Texas insurance companies limit the policyholder to $30 per day for a maximum of 30 days. The expectation is that the repair or replacement must have been concluded within the 30-day limit.


This auto insurance coverage is optional in Texas. It covers the expenses policyholders spend on roadside services to get vehicles back to driving condition. It covers such services like towing, changing of tires, jump starting car batteries, gas deliveries, and lockout services.

Discuss your auto insurance needs only with state-licensed, knowledgeable, and experienced insurance professionals, who are able to analyze your car insurance needs and offer you a variety of solutions.