Personal injury Library

How Does Car Insurance Work In Texas?

A general overview of automobile insurance coverage in Texas:

Auto insurance is complex business. Most people have not had the opportunity or need to delve into its details. Even insurance professionals are often confused by the wide variety of auto coverage, policies, and terms. If you have been the victim of a personal injury in an auto accident, including an accident with an underinsured driver, you need skilled representation from an experienced injury attorney who's spent years dealing with the complexities and, frankly, frustrations these policies and their adjusters pose.

Questions Answered on This Page:

  • How does car insurance work in the state of Texas?
  • What tactics do can insurance companies use to avoid paying victims?
  • What should I say/not say to a car insurance carrier?

How your car insurance policy works:

Like all insurance, auto insurance is a contract between you and an insurance company. At its heart, the contract says that, if you pay your premiums, the insurance company will pay you money if certain bad things happen to you or cause harm to another. The contracts, known as policies, last for certain lengths of time - often six months per contract in Texas. When you renew an insurance policy, you are agreeing to another six-month contract. Insurance for your car falls into several broad categories. Each of these categories of insurance coverage can be part of your individual policy.

  1. Liability
    Liability coverage is probably the insurance most drivers are familiar with. It refers to the damage you cause other to people and their vehicles. If you cause an accident with another vehicle, your liability insurance is designed to pay for that other vehicle's repair or replacement, and for that vehicle's occupants' medical bills, up to certain policy limits. Texas law requires all drivers to maintain a minimum level of $30,000 in liability coverage.

  2. Collision and Comprehensive
    This type of coverage deals with damage done to your vehicle. If your vehicle is damaged in an accident caused by someone else, collision insurance is designed to pay for your vehicle's repair or replacement. Like collision, comprehensive coverage is designed to pay for your vehicle's repair or replacement if your vehicle is damaged by something other than a collision, like fire, theft or flooding.

  3. Uninsured Motorist/Underinsured Motorist ("UM/UIM")
    UM/UIM regards physical injuries suffered by you and the passengers in your vehicle. You can read more about these two types of coverage on our UM/UIM page, but for right now, just know this:

    • Uninsured motorist coverage is for physical injuries caused when an uninsured motorist hits you. It also covers hit-and-runs in which you don't know who hit you.
    • Underinsured motorist coverage is also coverage for physical injuries caused when an underinsured motorist hits you.
  4. Loss of Use and Other Coverages
    Subject to limits the law imposes, you and the insurance company can contract for any kind of auto coverage you want. Another typical kind of coverage is loss-of-use coverage: your insurance company rents you a car while yours is being repaired. Other coverage include expenses for towing and for personal property lost or damaged in accidents, like expensive camera equipment lost in a stolen car. As well as Personal Injury Protection (PIP) coverage for injuries you've sustained that your own insurance may need to cover.

How the Other Driver's Car Insurance Works:

Now that you have an idea of how your car insurance works, let's see what happens when you're faced with the other driver's insurance following an accident. If you want to file a claim, you need to understand how casualty insurance works. The other driver's insurance company works to protect their assets from you. The carrier calls all the shots and they don't want to give you money.

What you need to know is that you don't have to file an insurance claim. You can contact a lawyer directly and work with them to recover your losses. Oftentimes, working with the carriers directly can harm your case. An experienced car accident attorney knows all the tricks the insurance companies use and can put you in the best possible position to be successful with your claim.

The dirty secret: car insurance companies don't pay what you deserve.

What we described above is largely theoretical. The insurance company is supposed to pay for this or that (in the form of settlements), but they find loopholes and excuses to not pay you or pay you next to nothing. How is this possible? For several reasons:

  • They hold all the cards. The insurance company has the money to pay you, and they therefore have all the leverage. There is no law mandating automatic insurance payments to you.
  • There can be legitimate reasons to withhold payment. Let's say you're in a car accident, the police report says the other driver is at fault, and the other driver had liability insurance. However, a police report isn't an addendum to the Ten Commandments. The other driver will likely tell his insurance company that the police got it wrong and YOU were at fault. As this point, the company will likely just deny your claim.
  • They want to pay you pennies on the dollar. You're free to deal with the insurance company on your own. There's a good chance they'd love to pay you something! But if they're nervous about having to pay out many thousands of dollars, they'll happily throw you a few bucks to make the problem go away.

Specific Tips For Car Accident Insurance Procedure

First and foremost, you'll need to know which policy covers the accident. Let's say, for example, the person who hit you is not the car owner. Well, the policy follows not the driver but the car. Therefore, the owner's insurance on the car would come into play first.

Secondly, know that your property damage claim is completely separate from your personal injury claim. Make sure you don't sign any insurance papers until you have a lawyer help you determine which claim is which, and that they're not being lumped together to pay you less. And on that note, are you working with:

We have experience with each of these payers, and as such, we're equipped to handle whatever they through at us.

Why you should call Grossman Law Offices:

Our office has over 25 years of experience handling car accident cases and working with car insurance carriers. If a Texas driver injures you and you have medical expenses for which you need to be compensated, you should call Grossman Law Offices toll-free at (855) 326-0000 to find out more about your potential case. Our attorneys will discuss your case with you, free of charge, and help you determine if you have a cause of action. Again, insurance coverage in Texas is an intricate area of the law. Get a lawyer who knows this area well. Protect your rights to compensation for your injuries.

Read more about how car insurance works:

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