Texas Auto Policy

Brief explanation of insurance law

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Travis County Medical Assistance Program (MAP)

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Free C.L.U.E. Auto Report and C.L.U.E. Personal Property Report - report includes loss history and information how to dispute claims:

Anatomy of a personal auto policy

The Texas personal auto policy generally follows the form outlined below. Until 2003, we all had the same policy - called the standard policy. It is still in use, though its use is declining. In 2003 the legislature passed a law that allowed insurance companies to write their own policies. Most of these newer policies offer less coverage, often without a corresponding savings. Commercial auto policies are a different animal and vary quite a bit. Here is what to look for in a personal auto policy.

A. Liability: This is the coverage everyone has. It is mandated by the Safety Responsibility Act, found in the Transportation Code. This is the coverage certified by the insurance card we carry in our vehicles. The minimum limits in Texas are now $30,000.00 per person hurt, $60,000.00 per collision, and $25,000.00 for property damage. The limits can be higher, but not lower. Some limits are quite a bit higher. Most coverage over $250,000/$500,000 is covered by umbrella or excess policies. It usually does not cost a lot more to raise your limits over the minimum.

B. Personal Injury Protection/Med Pay: Although these two coverages are both under B (B-1 and B-2 usually), they are very different. PIP is mandated and regulated by statute in the Texas Insurance Code. There are specific penalties when an insurance company does not fairly pay these benefits. PIP covers reasonable and necessary medical expenses, lost income (80%) and in some cases household services. If it is not waived in writing, in must be provided.

Med Pay on the other hand is a creature of the insurance companies. There are no statutory provisions and the insurance company can claim its money back from a liability payment with this coverage. Not so with PIP. Buy PIP. Don't buy Med Pay.

C. Uninsured/Underinsured Motorist Coverage: This coverage steps in if the at-fault driver did not at the time have insurance or did not have enough insurance. Like PIP, it is mandated and regulated by statute. Like PIP, if it is not waived in writing, it must be provided. UM/UIM limits must meet the minimum limits and cannot be higher than the liability limits on the same policy. This is a good reason to raise the liability limits. Never, ever allow the company to sell you lower UM limits than you have liability limits. Again, this is usually not expensive coverage.

D. Property damage: This coverage protects your automobile and the contents within the vehicle that are damaged in a wreck. There are two types - collision and comprehensive. Like it sounds, collision covers damages from a collision and comprehensive covers all other risks (hail, theft, etc.).

What to look for when buying auto insurance

1) Buy the standard policy: The "standard policy" refers to the policy form

promulgated by the Texas Department of Insurance in 1992. Before 2004 it was the form everyone used. In 2004 the legislature allowed the insurance companies to draft their own policies. Most of the new variations offer less coverage and more exclusions. Look for a "standard policy."

2) Buy Personal Injury Protection: This coverage is usually inexpensive and covers medical cost and lost wages for you, your family members and anyone else occupying your vehicle during a wreck. It may also pay loss of household services for nonwage earners. Most importantly, this coverage is mandated and governed by statute, so the insurance companies cannot just make up the rules. There are specific penalties if they don't pay when they should. PIP pays regardless of fault. Everyone should carry this valuable coverage. If you don't waive this coverage in writing, it has to be provided.

3) Don't buy Medical Payment: This is often offered as an alternative to PIP. It is inferior coverage in that it does not cover household services or lost income. It is not regulated by statute so the insurance companies can make up their own rules. Don't buy it. Buy PIP, instead.

4) Buy uninsured motorist coverage: This coverage will pay your damages if the "at fault" driver does not have insurance or does not have enough insurance to pay for your damages. It covers you, your family members and everyone else in your vehicle at the time of a wreck. Like PIP, if it is not waived in writing, it is part of the policy. Like PIP, it is regulated by statute. You can purchase UM limits up to the amount of your liability limits. Do so. It breaks my heart when I see a client who has been in a bad wreck and they have $100,000 in liability coverage but only $30,000 in UM coverage. What was their agent thinking?

5) If you want to save money, get higher deductibles: Raising deductibles, especially on collision coverage, can make a big difference. If your car is new, you may want to consider gap insurance to cover the notes. Read the fine print, however, since the gap coverage may not cover the deductible.

6) Check on line reviews of claim service: Like hiring an attorney, do not go by the advertising. There is a big difference between how some well-known companies handle claims.