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How Texas Car Accident Insurance Works

Having car insurance might seem like an inconvenience, but it’s one of the most important things a person can have to protect themselves financially after a car accident. Car insurance helps recover losses and shield a person’s finances from the inflated expenses of a car accident.

However, while everyone should have insurance, they should also be cautious about theirs. The system isn’t perfect, and car insurance companies are always looking for ways to fulfill their legal obligations to the insured while spending as little as possible. This makes understanding how car insurance works in the state of Texas important.

This guide is designed to help you receive the right insurance coverage, understand the laws insurers must follow in Texas, and help protect you from being treated wrong during the claim process.

Texas Car Insurance Coverage Requirements & Fault Laws

Often, drivers are curious whether Texas is a fault or no-fault car insurance state. A minority of states in the country have what is called no-fault car accident laws. These states require drivers to seek compensation from their insurance policy, regardless of who is at fault for the accident. In Texas, drivers enjoy the benefits of having fault insurance. In other words, they’re able to avoid using their insurance policy when they are not at fault for an accident. The difference between fault and no-fault insurance is further explored in our blog about the subject.

Texas car insurance law mandates how much coverage a person must carry.

A driver needs at least the following amounts of coverage in Texas:

  • $30,000 in coverage for each injured person up to $60,000
  • $25,000 in liability coverage for property damage

These requirements are commonly referred to as the 30/60/25 rule. More about Texas car insurance requirements can be read here.

What Laws Insurers Must Follow in Texas

When a person has paid insurance premiums for years, it’s reasonable for them to expect their insurer to be there for them when needed. However, since insurance companies work to preserve profits, they don’t always act in the interest of the people they’re supposed to help.

When an insurance company fails to provide the service they’re supposed to claimants, they might be committing something known as bad faith. This is illegal. Essentially, bad faith occurs when an insurance company is unfair or unresponsive for a claim. For example, if an insurance company takes too long to reply to a claim, they might be operating in bad faith.

Texas requires car insurances companies to:

  • Respond to a claim within 15 days
  • Commence an investigation into a claim
  • Gather all relevant information with the claim needed to investigate it

When a company isn’t being fair, is taking too long, or is ignoring a claim, they might be using a tactic designed to frustrate a claimant into accepting a low settlement once one is finally offered. If you suspect this is happening, it’s important to get in contact with a Texas bad faith insurance lawyer.

Call Arnold & Itkin LLP today at (888) 493-1629 for a free consultation. We're ready to help you decide if the insurance company is treating your fairly after your accident.


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