Auto Insurance Coverages and Considerations

by Brooksie Bonvillain Boutet

Liability auto insurance coverage protects everyone else on the road, but who is protecting you? Texas law only requires liability auto insurance coverage, although insurance companies are required to offer uninsured/under-insured motorist (UM/UIM) coverage and personal injury protection (PIP) coverage to you. Too many Texans purchase the minimum limits of liability coverage to comply with state law without any consideration of other auto insurance coverage available to protect them.

Liability Coverage

Liability coverage pays for another motorist’s damages if you are at fault for a collision. It does not protect you. Your insurance company will offer you various amounts of liability coverage starting at the minimum limits required by Texas state law, which are $30,000 per person with a total limit of $60,000 per collision. You can choose to increase the amount of coverage for an additional cost.

Uninsured/Under-insured Motorist Coverage

UM/UIM protects you when there is insufficient liability insurance coverage if you are in a collision and not at fault. The uninsured part protects you in the event the at-fault motorist does not have any liability insurance. Similarly, the under-insured part protects you in the event the at-fault motorist does not have enough liability insurance.

According to the Texas Department of Motor Vehicles (DMV), an estimated 20% of Texas drivers are uninsured. This number does not even account for the number of drivers who are under-insured.

Your insurance company is required to offer UM/UIM coverage to you, but you can sign a written rejection and decline this coverage. UM/UIM coverage protects you, so you should consider adding this coverage to your policy.

Personal Injury Protection Coverage

PIP coverage helps with your medical expenses and lost wages, regardless of fault. You can claim your PIP benefits immediately after a collision with documentation of medical expense or lost wages, while a claim against another party can take a substantial amount of time.

Your insurance company is required to offer PIP coverage to you, but you can sign a written rejection and decline this coverage. This type of coverage is relatively inexpensive and starts at a limit of $2,500, which can be increased for an additional cost. You should consider this coverage to protect yourself when you have unexpected medical bills and unplanned time off work.

Medical Payments Coverage

MedPay coverage is similar to PIP coverage, but there are two important differences. First, MedPay coverage only helps with medical expenses. It does not help with lost wages. Second, your auto insurance company may want to be reimbursed from any recovery in a liability claim against the at-fault party.

Although MedPay coverage can quickly help with medical expenses, PIP coverage may be a better fit for your needs because it also covers lost wages and your auto insurance company cannot make a claim for reimbursement.

Everyone is in a different financial situation. But we all want to protect ourselves, and our families, with the right amount of auto insurance coverage. When it’s time to renew your auto insurance, talk to your insurance agent about all of these coverages to be sure you’re protecting yourself—not just everyone else.