Car Insurance In Texas 101

One of the largest expenses of owning a car is paying for damages incurred from an accident. Every state in the nation requires that all drivers must prove that they're financially able to pay for costs associated with property damage, injury, or death and Texas is no exception. In the past, a few states allowed drivers to prove this obligation with a cash deposit or through posting a bond. Today however, more and more states are making car insurance a mandatory requirement for all licensed drivers. Car insurance in Texas is an example of today's requirements.

For the new car owner and/or driver, understanding how car insurance in Texas works could seem intimidating at first -- but it really isn't that difficult to understand once you learn some of its basic terminology and how specific terms can affect driver protection. This article will explain what car insurance in Texas is and how it attempts to protect you as a Texas resident.

Basically, car insurance in Texas is a policy that agrees to pay for costs resulting from an accident, damage, or theft. The holder of an insurance policy (the licensed driver) is responsible for paying for the insurance through a premium (a monthly payment). In the event of an accident, the policyholder is also responsible for paying a deductible (a payment toward the costs of the accident). Minus the deductible, car insurance in Texas will then pay the remaining balance on costs incurred by damages.

As in most other states, car insurance in Texas is varied and ranges from the most basic and least expensive (liability insurance) to the most extensive and most expensive (comprehensive or full coverage). Known as the "20/40/15" policy, minimum car insurance in Texas requires a $20,000 coverage policy for each injured person and a $40,000 coverage policy for everyone involved in an accident. It also requires a $15,000 coverage policy for damaged property. But the costs of car insurance in Texas (premium rates) could rise or fall according to the policyholder's performance as a driver. A bad driver with a long record of traffic tickets and/or accidents will typically pay a higher premium while a good driver with no record will usually pay a much lower premium - even on the same type of insurance.

Drivers with a bad driving record may find it difficult (if not impossible) to get standard car insurance in Texas, but may find coverage for up to three years through the Texas Automobile Insurance Plan Association. TAIPA is available to drivers who have been rejected by at least two insurance companies.

Other considerations are factored into the premiums of car insurance in Texas as well and they very well may not have anything to do with driving performance. Examples include: the age of a driver, the number of miles on the car being insured, the sex of a driver, the marital status of a driver, where a driver lives, the type of car being insured, and the number of claims already existing within a driver's record. As an example, premiums can raise for drivers who operated a vehicle without car insurance in Texas for more than thirty days.

Some of these considerations do not seem fair and even seem downright biased. But it's important to understand that they're the result of statistics which dictate that certain characteristics (such as age, sex, and residence) significantly contribute to high coverage costs.