Auto Insurance Advice for the Lone Star State

Uninsured drivers are especially prevalent in Texas. The Texas Department of Insurance estimates that one in every five drivers in the state is uninsured. To help reduce this number, authorities have established mandatory auto policy laws. According to these laws, every driver must either carry a minimum amount of vehicle liability coverage or show proof of financial responsibility upon registering a vehicle. Read on to learn more about these laws and how they affect the policy buying process in the area.

Proving Financial Responsibility

You can prove financial responsibility in several ways. First, you can purchase a liability policy that complies with the guidelines. Alternatively, you can prove financial responsibility by doing any of the following:

• Visit your county clerk to file a surety bond. Two people must be listed on the bond, and both must own real property in the state of Texas.
• Deposit $55,000 in securities or cash with the county comptroller.
• Deposit $55,000 in cash or a cashier's check with the county judge.
• Obtain certification from the Texas Department of Transportation that you are self-insured. You can only pursue this option if you have more than 25 cars, so this option is usually reserved for dealerships.

Liability Coverage Requirements

The state has liability requirements of 25/50/25. This means that the Texas auto policy you purchase must have:

• $25,000 of bodily injury coverage for one person per accident
• $50,000 of bodily injury coverage for two or more persons per accident
• $25,000 of property damage coverage per accident

When you buy protection, you will receive a proof of coverage card confirming that you carry at least the legal minimum amount required. You will need to show this card to law enforcement officers if you are pulled over or involved in an accident. The Lone Star State also requires drivers to provide proof when they register a vehicle or apply for a driver's license. Remember that the amounts listed above are the bare minimum for liability coverage; most drivers would be well-advised to carry much more.

Breaking the Laws

Not only is driving without a policy risky, it's also very difficult to get away with because of the verification programs. All Texas Department of Transportation departments and law enforcement officers will have access to policyholder information, which means the status of your plan can easily be verified. If your policy is canceled or lapses for any other reason, you will hear from the Department of Transportation and have to submit proof of current insurance. Failure to do so may result in the suspension of your driver's license and registration. To lift the suspension, you must provide proof of current liability coverage and pay the reinstatement fee of $175-$350.