Texas Car Insurance Laws and Requirements

Whether you are new to Texas, buying your first car or simply brushing up on the subject, it is a good idea to learn as much as you can about Texas auto liability insurance laws. Knowing these requirements can save you from a hefty fine (or worse, if you're in an accident).

In Texas, the auto liability insurance laws are pretty straightforward. As in most other U.S. states, the law requires drivers to carry liability insurance on their vehicles, while collision, comprehensive, and other types of coverage are optional.

Minimum Liability Insurance Requirements

According to the Texas Department of Transportation (TxDOT), auto liability insurance requirements are the following:

• Bodily Injury: Minimum $20,000 per single injured person per accident
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• Bodily Injury: Minimum $40,000 per accident with two or more injured parties
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• Property Damage: Minimum $15,000 per accident

This means that if you are in an accident for which you are at fault, your Texas auto liability insurance needs to cover $40,000 for all injured parties (or a minimum of $20,000 for single individuals) and $15,000 for any damage you inflict on someone else's property (such as their vehicle).

Keep in mind that these are only the minimum coverage amounts; if you want to insure yourself against further liability, choosing higher limits is advised. For example, if you carry only the minimum, and you cause $40,000 worth of property damage in an accident, you'll have to cover the remaining $25,000 out of pocket. This is not a debt most people can swing.

Proof of Liability Insurance

To encourage financial responsibility among its residents, Texas requires drivers to submit proof of insurance in a variety of situations. If you are pulled over by a police officer, he or she will automatically ask to see your driver's license and your insurance card. If you don't have proof of insurance, you'll get a ticket.

Texas residents are also unable to register vehicles, obtain vehicle inspections or renew driver's licenses without proof of Texas auto liability insurance. These laws are put in place partly to stop residents from obtaining insurance only for a brief period of time (in order to renew registration, for example), then canceling the policy afterward.

Moving to Texas

If you are new to the state, Texas auto liability insurance laws allow newcomers a 30-day grace period to purchase insurance on their vehicles. The clock starts when you take a full-time job or establish residency, and it is best to take care of this as quickly as possible.

Additionally, you must keep your liability insurance card in your vehicle at all times. This way, if you are stopped by a police officer, you'll be able to prove financial responsibility. If possible, keep a copy in your vehicle (in the glove compartment, for example) and another copy in your wallet, in case your vehicle is stolen or otherwise unavailable when you need proof.