Most drivers believe they can make it with just the minimum required coverage. When you only purchase the minimum required insurance coverage to avoid a traffic violation, you and your family are exposed to potentially devastating financial hardships if you find yourself in the unfortunate position of being in an accident.
Most minimum coverage plans leave out some of the most important aspects of insurance coverage, primarily Personal Injury Protection (PIP), Uninsured Motorist (UM), and Under-Insured Motorist (UIM). Auto insurance is designed to protect you and your family in the event of an accident – not just avoid a ticket in a traffic stop.
In this article, we break down the different types of essential auto insurance in Texas. We explain what each type of insurance is, what it covers, and how best to utilize it for your specific circumstances.
Uninsured Motorist (UM) Coverage
Uninsured motorist coverage (UM coverage) is an insurance policy that provides protection for individuals who are involved in accidents with drivers who do not have insurance.
What does UM coverage cover?
UM coverage helps cover the costs associated with injuries and damages that result from accidents where there is an uninsured driver involved. Here’s what uninsured motorist coverage typically does:
Medical expenses: Uninsured motorist bodily injury (UMBI) coverage helps pay for medical expenses resulting from injuries sustained in an accident caused by an uninsured driver. This can include hospital bills, doctor visits, surgeries, rehabilitation, and other necessary medical treatments.
Lost wages: UM coverage may compensate you for lost wages if you are unable to work due to injuries sustained in an accident caused by an uninsured driver. This coverage helps offset the income you would have earned during your recovery period.
Pain and suffering: Uninsured motorist coverage may provide compensation for pain, suffering, and emotional distress resulting from the accident and the injuries sustained. These damages are typically subjective and can vary depending on the severity of the injuries and the impact on the individual’s life.
Property damage: Some UM policies also include uninsured/underinsured motorist property damage (UMPD) coverage. UMPD covers the cost of repairing or replacing your vehicle or other property damaged in an accident caused by an uninsured or underinsured driver.
It’s important to note that the specific details and coverage limits of uninsured motorist coverage can vary depending on your insurance policy and the laws of your jurisdiction. UM coverage is optional in many jurisdictions, but it is generally recommended as it provides an additional layer of protection in case you are involved in an accident with an uninsured driver.
Is uninsured motorist coverage required in Texas?
Uninsured motorist coverage (UM coverage) is not legally required in the state of Texas. However, Texas law does require auto insurance companies to offer UM coverage to policyholders. When purchasing auto insurance in Texas, the insurance company must provide the option to purchase UM coverage, and if the policyholder chooses not to purchase it, they must sign a written rejection form.
The purpose of offering UM coverage in Texas is to give drivers the opportunity to protect themselves in the event of an accident with an uninsured or underinsured motorist. Although it is not mandatory, it is highly recommended to consider purchasing UM coverage as it can provide valuable financial protection in case you are involved in an accident with a driver who lacks insurance or has insufficient coverage.
It’s important to review and understand the terms and coverage limits of UM coverage when considering its inclusion in your auto insurance policy.
Under-Insured Motorist (UIM) Coverage
Underinsured motorist coverage steps in when you’re in a car accident with an at-fault driver whose liability limits are too low to cover the damage or medical expenses.
What does UIM coverage cover?
UIM coverage helps bridge the gap between the at-fault driver’s insurance coverage and the actual costs incurred due to the accident. Here’s what underinsured motorist coverage typically does:
Medical expenses: Underinsured motorist bodily injury (UIMBI) coverage helps pay for medical expenses resulting from injuries sustained in an accident caused by an underinsured driver. If the at-fault driver’s insurance policy does not have enough coverage to fully compensate you for your medical costs, UIM coverage can step in to cover the remaining expenses.
Lost wages: UIM coverage may provide compensation for lost wages if you are unable to work due to injuries sustained in an accident caused by an underinsured driver. If the at-fault driver’s insurance coverage is insufficient to cover your lost income, UIM coverage can help make up the difference.
Pain and suffering: Underinsured motorist coverage may also provide compensation for pain, suffering, and emotional distress resulting from the accident and the injuries sustained. These damages are typically subjective and can vary based on the severity of the injuries and their impact on your life.
Property damage: Some UIM policies include underinsured motorist property damage (UIMPD) coverage. UIMPD covers the cost of repairing or replacing your vehicle or other property damaged in an accident caused by an underinsured driver when their insurance coverage is insufficient.
The specific details and coverage limits of underinsured motorist coverage can vary depending on your insurance policy and the laws of your jurisdiction. It is important to review your policy and consult with an insurance professional or agent to understand the specific terms and conditions of your UIM coverage.
Personal Injury Protection (PIP) Coverage
PIP stands for personal injury protection, and it is an extension of your car insurance which covers medical expenses and, in some cases, even lost wages. It is often called “no-fault” coverage because its inherent comprehensiveness pays out claims regardless of who is at fault in the accident.
What does PIP coverage cover?
PIP coverage is available in certain states and its specific details can vary depending on the jurisdiction and insurance policy. Here’s what personal injury protection coverage typically does:
Medical expenses: PIP coverage helps cover medical expenses related to injuries sustained in a car accident, including hospital bills, doctor visits, surgeries, medications, rehabilitation, and other necessary treatments. PIP coverage may have specific limits and deductibles that vary depending on the policy.
Lost wages: If you are unable to work due to injuries sustained in a car accident, PIP coverage can provide compensation for a portion of your lost wages. This can help you maintain financial stability while recovering from your injuries.
Funeral expenses: In the unfortunate event of a fatal accident, PIP coverage may also help cover funeral and burial expenses for the insured or covered individuals.
Essential services: PIP coverage may include reimbursement for necessary services that you are unable to perform yourself as a result of your injuries. This can include household chores, child care, or other essential services required during your recovery.
Passenger coverage: PIP coverage often extends to passengers in your vehicle, providing them with similar benefits for medical expenses and lost wages resulting from the accident.
It’s important to note that PIP coverage is subject to specific limits and requirements set by state laws and individual insurance policies. The availability and specific details of PIP coverage depend on the jurisdiction in which the policy is issued.
UM cover vs. UIM cover
UM (Uninsured Motorist) insurance and UIM (Underinsured Motorist) insurance are two types of coverage designed to protect individuals involved in accidents with drivers who either have no insurance or insufficient insurance coverage. While they are similar in nature, there are key differences between UM and UIM insurance:
Uninsured Motorist (UM) Insurance
- UM coverage provides protection when you are involved in an accident caused by an uninsured driver, meaning the at-fault driver does not have any auto insurance coverage.
- UM insurance helps cover your medical expenses, lost wages, and other damages resulting from the accident caused by the uninsured driver.
- UM coverage steps in to provide compensation for your injuries and damages when the responsible party lacks any insurance coverage.
Underinsured Motorist (UIM) Insurance:
- UIM coverage provides protection when you are involved in an accident caused by a driver who has insurance, but their policy limits are insufficient to cover your full damages.
- UIM insurance helps bridge the gap between the at-fault driver’s insurance coverage and your actual costs, when their coverage is not enough.
- UIM coverage allows you to make a claim with your own insurance company to seek additional compensation up to the limit of your UIM policy.
What is the minimum required auto insurance coverage in Texas?
In Texas, the minimum required auto insurance coverage is often referred to as “30/60/25” coverage. This means that drivers must carry at least the following liability coverage limits:
- $30,000 bodily injury liability coverage per person: This covers injuries or death to another person in an accident where you are at fault. The maximum amount your insurance company will pay for an individual injured in the accident is $30,000.
- $60,000 bodily injury liability coverage per accident: This covers the total amount of bodily injuries or deaths per accident when multiple people are injured or killed. The maximum amount your insurance company will pay for all injured parties combined is $60,000.
- $25,000 property damage liability coverage: This covers the damage you cause to another person’s property, such as their vehicle or any other damaged property, in an accident where you are at fault.
It’s important to note that these are the minimum required liability coverage limits set by Texas law. However, we highly recommend considering higher coverage limits to provide better protection and ensure you are adequately covered in the event of an accident. Additionally, liability coverage only protects others involved in an accident caused by you, not your own injuries or property damage.
According to the Insurance Information Institute, a whopping 12.6 percent of motorists, or about one in eight drivers, in the United States are uninsured. Despite the fact that it’s the law to have a minimum level of auto insurance coverage, many people do not follow this advice. This makes an even stronger case for bolstering your own minimum insurance coverage with supplementary policies like UM, UIM and PIP.
Do I need UM/UIM and PIP insurance coverage in Texas?
Having the right insurance can make all the difference in what you pay after an auto accident, as well as influence how your claim is handled. The state of Texas only requires drivers to have liability insurance coverage, which helps the other person in the event of an accident. Liability coverage protects you from the risk of liabilities by lawsuits or other claims from other parties, but it doesn’t fully cover you.
Liability insurance does not include collision or comprehensive coverage to fix your car, towing, rental cars, or the other party being uninsured/under-insured. You might think that everyone has liability coverage because it’s the law, but over half the accident victims who call our law firm have at least one party in the accident who was uninsured! Skipping the proper coverages to save a few bucks can and will hurt you financially if you are injured or if your car is too damaged to drive (or both). The resulting domino effect can be catastrophic when you can’t work, can’t get to work, and potentially lose your job, home, and your credit rating due to unpaid medical bills.
The more insurance coverage you have, the better off you will be in the event of an accident — but you need to find coverage that fits your budget. When getting that insurance quote, please take a moment and think about the devastating effects that high medical bills and time missed from work would mean to your budget and your family. PIP, UM and UIM coverage are not required by many state minimum coverage plans, and therefore many people neglect to purchase them. These three types of coverage can and will make it easier for you to recover physically and financially if you are in an accident.
Staying protected on Texas roads
Even with all the insurance available, sometimes accidents happen — and when they do, it’s best to have legal help on your side. Hiring an experienced Dallas car accident lawyer from Reyes Browne should be your top priority if you’ve been involved in an auto incident in Texas. Our impressive case results speak for themselves — we have a proven track record of securing the highest possible settlements for our clients, many of whom have come up against uninsured motorists. Contact us today for an obligation-free chat to discuss your case.
