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Auto Insurance Basics

ICT represents Property and Casualty insurers doing business in Texas, and one of the key products our member companies provide is auto insurance. Auto insurance provides financial protection against a wide array of perils: traffic collisions, weather-related damages, theft, vandalism and more.

You’ll need to check the coverages on your own policy for coverages specific to you, but generally auto insurance is broken down in to a few main coverage areas:

Liability Coverage

Each state sets their own minimum levels of liability, Texas has set their minimums at “30/60”. If you carry minimum levels of liability, that means your policy provides $30,000 of liability protection per person, and $60,000 of liability protection per accident. If you are at fault in a collision that results in bodily injury to the other party, this is the protection available to you. High limits are available, generally speaking (and this can vary by company), levels offered are 30/60, 50/100, 100/300, and 250/500.

The other component of auto insurance liability protection is for property damage. If your limits of liability are 30/60/25, you have $30,000 of liability coverage per person, $60,000 of liability coverage per accident, and $25,000 of liability coverage for property damage. This is the amount available in your policy to repair/replace a car or other property that you have damaged as a driver in an at-fault accident.

Uninsured/Underinsured Motorist Coverage

Known as “UM/UIM”, this coverage provides protection if another party is at-fault and either doesn’t have insurance or doesn’t have enough insurance. The insurance company will pay the damages, and then usually attempt to recover their expenses from the at-fault party, typically through subrogation.

Comprehensive and Collision Coverage

Commonly referred to as “Full Coverage”, Comprehensive and Collision coverages provide protection for the policy owner’s vehicle.

Collision coverage is used to repair vehicle damaged when the policy owner is at fault, and a deductible is applied. If you carry a $500 deductible, you would be responsible for the first $500 of repair costs to your vehicle should you be at-fault in an accident.

Comprehensive coverage, sometimes referred to as “Other Than Collision” coverage, provides protection for cars damaged by events other than collisions. Theft, hail damage, animal impacts, flood, and vandalism would be examples of damages typically covered under Comprehensive Coverage. A deductible would apply to this coverage as well.

Other Coverages

There are a host of other coverages and endorsements available, varying from company to company, including Rental Car Reimbursement (which pays the cost of a rental car should your insured vehicle be involved in a covered claim), Loan/Lease Payoff (also known as GAP coverage, which covers the gap in value between the purchase price or loan amount and the Actual Cash Value of the vehicle), and Towing coverage (sometimes referred to as “Roadside Assistance”, a coverage available that will pay/reimburse expenses related to towing or service of a vehicle involved in a claim.

Auto Specific Resources

ICT member company USAA produces the “It Can Wait” campaign, drawing attention and working to prevent accidents caused by texting while driving.

ICT member company State Farm conducts an annual Distracted Driving Survey and publishes the results.

Comparison of Policy Types: Home, Auto, Flood, Windstorm

The Texas Department of Insurance, along with the Office of Public Insurance Counsel hosts helpinsure.com, a site intended to help Texans with auto, commercial and residential property insurance.