ALL ABOUT AUTOMOBILE INSURANCE
Or Everything you ever wanted to know about car insurance but
didn't know who to ask
Texas law requires you to have auto insurance, and if you still owe money on your vehicle, your lender demands it. This publication provides answers to
frequently asked questions about auto insurance: The information contained in this website gives you general information about automobile insurance, but
it is not a substitute for the policy itself.
- What coverage's am I required to have?
- Who is covered by my policy?
- What coverage's are available?
- Does my policy pay for damage to a rental car?
- Is my insurance good in Mexico?
- How do accidents and tickets affect my premium?
Texas has an automobile insurance Consumer Bill of Rights. Your company must send you a copy with your policy or policy renewal. Take time to read it.
Please click on the following links for additional Automobile information.
(excerpts obtained from the Texas State Board of Insurance)
Auto insurance pay for damages, injuries and other losses
specifically covered by an auto insurance policy. Some coverage's, such as
liability insurance, are required, while others are optional. Please read
your policy carefully to know what it covers. Pay special attention to the
exclusions, which describe things your policy does not cover.
Texas Requires Proof of Financial Responsibility!
If you drive in Texas, you must show you can pay for
accidents you cause. Most Texas drivers do this by buying auto liability
insurance. The law requires minimum coverage of $20,000 per injured person, up
to a total of $40,000 for everyone hurt in an accident, and $15,000 for property
damage. This basic coverage is called 20/40/15 coverage. However, basic coverage
might not be enough if you are held liable for an accident. You should consider
buying more than the basic limits.
Your insurance company will send you a
proof-of-insurance card listing the covered automobiles and drivers and showing
the policy number and expiration date. Your policy or a temporary binder also is
acceptable evidence of insurance. You'll have to show proof of insurance when
you
Texas
law provides severe penalties for violating financial responsibility laws:
Note:
Your Texas policy automatically meets the financial responsibility requirements
of other states and Canada.
The
Declarations Page
The
front page of your policy is called the "declarations page." It
contains useful information such as
It
is a good idea to have the declarations page in front of you when calling or
writing the insurance company or the Texas Department of Insurance (TDI) about
your policy.
You
should also read the Automobile Insurance Consumer Bill of Rights. Your company
must send you a copy of the Bill of Rights with your policy or policy renewal.
The Bill of Rights is a summary of your rights under Texas law.
Auto
Insurance Coverages
The
Texas Personal Automobile Policy offers eight common types of coverage. You
select and pay for each coverage you want. The eight types of coverage are:
- Liability
Pays:
Damages caused by you and other drivers covered under your policy to another
person's vehicle or property as a result of an automobile accident. This is the only auto insurance required by Texas law.
The insurance company will pay amounts
for which you are legally responsible, up to your policy's dollar limits. These
may include the other party's
Liability also pays attorney fees if
you are sued and bail up to $250 if you are arrested.
Covers:
You, your family members, and anybody else driving with your permission, even if
they don't have their own liability insurance.
Unless excluded by the policy, you and your family members also are
covered when driving other peoples automobiles - including rental cars but not
non-owned cars regularly available to you such as a company car.
- Medical
Payments
Pays:
Medical and funeral bills arising from motor vehicle accidents, including those
in which the victim was a pedestrian or a bicyclist.
Covers:
You, your family members, and passengers in your car, regardless of who caused
the accident. You can't collect from both your medical payments and your
uninsured motorist/underinsured motorist coverage's for the same medical bills.
- Personal
Injury Protection (PIP)
Pays:
Same as medical payments coverage, plus:
Covers:
Same people as medical payments coverage.
An insurance company must offer you
$2,500 in PIP, but you can buy more. If you don't want PIP, you must reject it
in writing.
- Uninsured
Motorist (UM)
Pays:
Your losses from an accident caused by a hit-and-run driver or an uninsured
motorist, up to your policy's dollar limits. Also pays if the other driver did
not have enough insurance to cover all your expenses.
Covers:
You, your family members, passengers in your car and anybody driving with your
permission.
Underinsured
Motorist (UIM)
Just as some drivers don't carry any auto insurance
at all, others don't carry enough to pay for damages from their accidents.
UIM coverage pays for death and injury expenses to you or occupants of your car
when the other person's insurance coverage is inadequate.
Insurers must offer UM/UIM coverage,
but you can reject this coverage in writing.
Note:
Your UM/UIM insurance pays for a hit-and-run accident only if you promptly
report it to the police.
- Collision
(Damage to Your Car)
Pays:
Cost of fixing or replacing your car after an accident, regardless of who was
driving or who was to blame.
Physical damage also provides coverage if your vehicle is stolen.
Coverage Limit:
Payment is limited to your cars actual cash value, minus your deductible. Actual
cash value is the market value of a car like yours before it was damaged. To
lower your premiums, you might consider either raising your deductible or dropping this coverage
all together if you have an
older car that is paid for.
- Comprehensive
(Physical Damage Other than Collision)
Pays:
Cost of replacing or fixing your car if it is stolen or damaged by fire,
vandalism, hail, or another cause other than collision. Comprehensive coverage
also pays for a rental car or other temporary transportation if your car is
stolen.
Coverage Limit:
Payment is limited to your cars actual cash value, minus your deductible.
Caution
- Your policy won't pay for auto theft unless you report it to the police.
- Towing
and Labor
Pays:
Towing charges when your car can't be driven. Also pays labor charges, such as
changing a tire, at the place where your car broke down.
- Rental
Reimbursement
Pays:
A set daily amount for a rental car if your car is stolen or is being fixed
because of damage covered by your auto policy.
|
Available
Coverages with a Texas Personal Automobile Policy
|
|
Type
of Coverage
|
Pays
For
|
Covers
|
Required?
|
|
Liability
|
Other peoples medical expenses and auto repairs,
attorney fees, and $250 bail
|
You, your family, and others driving with your
permission
|
By state law
|
|
Uninsured/Under-insured
Motorist
|
Medical and funeral expenses, car repairs, car
rental and replacement of damaged contents
|
You, your family, and your passengers
|
No, but company must offer
|
|
Medical
payments
|
Medical and funeral expenses
|
You, your family, and your passengers
|
No
|
|
Personal
Injury Protection (PIP)
|
Medical and funeral expenses, lost wages,
homemaker/caregiver services
|
You, your family, and your passengers
|
No, but company must offer
|
|
Collision
|
Car repair or replacement after an accident
|
Your car, regardless of driver
|
By lenders
|
|
Comprehensive
(Physical Damage other than Collision)
|
Car repair or replacement after fire, hailstorm,
theft, or other non-collision event; rental car after theft
|
Your car
|
By lenders
|
|
Towing
& Labor
|
Towing and labor charges when your car is disabled
|
Your car
|
No
|
|
Rental
Reimbursement
|
A rental car if your auto is undergoing repair for
covered damage
|
You and your family members
|
No
|
Your personal auto policy covers your spouse, blood relatives, in-laws,
adopted children, wards, and foster children living in your home, even if not
named on the policy. "Spouse" includes a spouse living elsewhere
during a marital separation. Also covered are family members attending school
away from home.
Auto
rental agencies offer collision damage waivers as well as liability policies,
which offer separate types of coverage to the renter. The collision damage
waiver is not insurance; it is an agreement that the rental company will give
up, or waive, its right to recover costs of property damage to the auto from the
renter with certain exceptions, regardless of who is at fault. You might not
need this extra expense because
some
auto liability policies already covers such
damage, however, you will need to review your individual policy to make sure you
have this coverage. Also, even if your policy does provide for this
coverage, the coverage limit might be less than the value of a rental
car.
If
you rent cars often, it may cost less to raise the liability limit on your auto
policy rather than buying collision damage waivers each time you rent. The Texas
Automobile Rental Liability Policy provides liability insurance for renters who
do not have a personal auto policy. Texas law requires liability coverage for
all drivers in Texas. It pays for bodily injury and property damage to others
that result from the actions of the insured driver.
Yes.
You can buy a non-owner liability policy. A non-owner policy pays for damages
and injuries you cause when driving a borrowed or rented car but not for damage
to the auto you are driving.
Mexico
does not require automobile insurance. However, be advised that in Mexico you
can be held criminally responsible as well as financially responsible for any
auto accident you cause. In addition, the police may detain you until they
determine who is at fault if you are in an accident that results in an injury.
You will have to show that you either have insurance recognized by the Mexican
government or the financial ability to pay any judgment against you.
Mexico does not recognize U.S. auto
liability policies. You can buy
Mexican liability insurance from the American Casualty Agency here on our
website by going to:
*Quote
and/or buy Mexican Insurance Coverage here
Some U.S. companies provide a free endorsement extending your policy's coverage to infrequent trips of up to 10 days and as far as 25 miles into Mexico. You
can buy coverage for longer stays, but it is valid only within 25 miles of the border. Telephone books in border towns list insurance agents that specialize in
car insurance for travel in Mexico.
You also can buy a limited Mexico "tourist" endorsement that extends your Texas liability coverage to pay expenses exceeding those covered by a
Mexican liability policy. This endorsement covers trips of any distance and any length of time.
Ask your agent which endorsements your insurance company offers. Remember that some companies attach endorsements to your policy automatically, while others
do so only at your request. Other companies do not cover accidents in Mexico at all.
Yes, if you have comprehensive "other than collision" coverage, the damages will be paid less your deductible and subject to your vehicles insured
value.
Your policy will not pay for tapes, compact discs, cellular phones, citizen band radios or for stereo equipment not permanently installed in your car unless
you pay extra for separate coverage.
Texas law does not mandate this, but lenders usually require collision and comprehensive coverage on cars they are financing.
Yes, but there are certain limitations. An additional car automatically has the same coverage as the car with the broadest coverage provided by your policy.
For example, if you have two cars - one with liability coverage only and one with liability, collision, and comprehensive - and you buy a third car, the third
car will automatically have liability, collision, and comprehensive.
A replacement car, however, automatically has the same coverage as the car it replaced. For example, if you trade in an older car, which has only liability
coverage, on a new car, the new car automatically has only liability coverage.
Be sure to notify your insurance company as soon as possible that you have added or replaced a car and which
coverage's you want for the new car. You could
lose coverage on the new car if you wait longer than 30 days.
Don't. Because the vehicle is financed the lender will buy single-interest automobile physical damage coverage to cover their interest in that
vehicle. Single-interest coverage is very expensive and protects only the lender, who will add then premium to your note. You may drop collision
and comprehensive once you have paid off your car loan, but you should keep the these
coverage's as long as you owe money on your car.
- A preferred company offers the lowest rates to the most preferred insurance risk.
- A standard company's rates are somewhat higher than a preferred company's and are sold to those that do not qualify for the preferred rates.
- A non-standard company sells at high rates to drivers with poor driving records or other problems.
- Many insurers actually are groups of companies. An insurance group might consist of a preferred company, a standard company and a county mutual.
- Your age and, for younger drivers, your marital status. Male drivers under 25 and unmarried women under 21 have the highest rates. Drivers
over 50 may get discounts.
- The county where you keep your car. Because urban counties have more accidents and auto thefts, their rates tend to be higher than those of rural
areas.
- Your car. Collision and comprehensive rates are highest for luxury, high-performance, and sports cars. Rates may also be higher for cars that damage
easily or cost more to repair than others.
- How you use your car. Rates are higher for cars driven to work or used for business.
- Your deductibles. Deductibles are your share of the cost of a collision or comprehensive claim. You can reduce your premium by raising your
deductibles.
- Surcharges. Dollar penalties are added for accidents resulting in property damage of $1,000 or more.
- Discounts. Some discounts are required by the state, while others are optional with companies. Ask your agent. County mutuals, however, are not
required to give any discounts.
| Auto Insurance Discounts |
| Mandatory Discounts |
Amount of Discount |
| Defensive driving and driver education courses for young drivers |
10 percent off liability, collision, medical payments, and PIP |
| Airbags and other passive restraints |
15 percent off medical payments and PIP (driver's side) 30 percent off medical payments and PIP (both sides) |
| Drug/alcohol education |
5 percent off liability, collision, medical payments, and PIP |
| Anti-theft devices |
Reduces comprehensive premium; amount varies by device and county |
| Two or more cars on a policy |
20 percent off liability, medical payments, and PIP 15 percent off collision |
| Optional Discounts |
|
Companies may give discounts for
- your age and annual mileage driven
- policy renewal, with a good claims and driving record
- anti-lock brakes
- a parent or family whose young driver is away at school without a car
- full-time college and high school students with a "B" or 3.0 average
- cars with automatic daytime running lights
- membership or adult leadership in certain youth organizations.
|
Amount varies by company |
Decide before shopping what coverage's you need. If you are buying collision and comprehensive
coverage's, decide on the deductibles you want.
Choose the highest deductible you can afford (and the lender will accept). Remember, the higher the deductible, the more you will have to pay out of your own
pocket before the insurance will pay, however, higher deductibles will lower your premium.
Because rates vary widely, compare "apples to apples." Make sure the quotes you get are for the same
coverage's.
Answer questions truthfully and don't try to hide anything. Wrong information could get you an incorrect price quote or denial of
coverage. If it is proven that incorrect information was given fraudulently, coverage can be denied and the policy terminated by the company.
A good driving record can save you money. Preferred companies, which charge the lowest rates, accept only applicants with good driving records. A good
driving record can get you a discount from some companies when you renew your policy. A driver with any activity "what-so-ever" on his/her record
could be disqualify from a companies most preferred rates.
Tickets and accidents can mean higher premiums if companies classify you as high risk. You could end up in TAIPA, also known as the assigned risk plan.
Accidents or major driving offenses can add surcharges to your premium. Surcharges are mandatory and stay on your premium for three years. Please note
that while a company can only charge an additional surcharge for activity within the previous three years, some companies will review a five year history to
determine driving characteristics of individual drivers for company placement.
For example, all things being equal, a driver that has had a clear driving record for five consecutive years may be offered coverage in a company with lower
rates than a driver whose five year history contains unfavorable activity.
| Policy Surcharges |
| |
Most Drivers* |
TAIPA Drivers** |
| One accident (at-fault) in 36 months |
15% |
20% |
| Two accidents |
35% |
40% |
| Three accidents |
60% |
60% |
| Each moving violation (speeding, etc.) |
0% |
15% |
| Involuntary manslaughter |
60% |
60% |
| Driving under the influence |
60% |
60% |
| Criminally negligent driving |
60% |
60% |
| No license, or license suspended |
35% |
60% |
* Surcharges for most drivers are percentages of the lowest benchmark rates in your county for liability, collision, PIP, and medical payments
coverage.
** TAIPA surcharges are percentages of the drivers´ actual premiums.
Minors convicted of driving under the influence can face serious consequences. To combat the problems associated with underage drinking, TDI has joined
forces with more than 40 public and private organizations in the Alliance Against Underage Drinking. For more information, visit the Alliance Web site
www.2young2drink.com
A cancellation or non-renewal notice cutting off your car insurance can be painful and frustrating.
Q: What is the difference between cancellation and non-renewal?
A: Cancellation means the company terminates your policy before it runs out. Non-renewal means the company refuses to
renew your policy when it expires.
Q: Does an company have to say why it canceled or refused to renew my policy?
A: A company must explain in writing its reasons for declining, canceling, or not renewing your policy. This
explanation must include
- the precise incident, circumstance, or risk factor that violated the company's
underwriting guidelines
- the insurer's sources of information about the incident, circumstances, or risk factor.
Q: What rights do I have against unfair cancellation?
A: An insurance company cannot cancel an auto policy that has been in effect for more than 60 days unless:
- you fail to pay your premium
- you file a fraudulent claim
- your driver's license or motor vehicle tags are suspended or revoked. This also applies to other drivers who live with you or customarily use your car.
Q: Can my company cancel me during the first 60 days after I buy a new policy?
A: During the first 60 days, the company may cancel for any lawful reason, including a ticket or an accident.
If the company canceled you because of an accident, it still has to pay for damages covered by your policy.
The company must give you written notice at least 10 days before canceling your policy.
Q: Do I get my money back if my policy is canceled?
A: If either you or the company cancels your policy, the company must refund premiums paid in advance that did not buy
coverage. This amount is called the "unearned premium." For example, if you paid a six-month premium of $600 and your policy is canceled after one
month, the company owes you $500 in unearned premium.
Q: What rights do I have against unfair non-renewal?
A: Your policy must be in effect for 12 months before the company can refuse to renew it. This means a six-month
policy must be renewed to give you a full 12 months of coverage.
The company must give you 30 days´ notice before not renewing your policy.
An insurance company cannot refuse to renew your policy because of your age or because a family member reaches driving age. Companies cannot discriminate
because of race, color, religion, sex, family status, national origin, or disability.
Q: Can a company refuse to renew my policy because of claims that were not my fault?
A: Texas rules forbid non-renewal because of
- weather-related claims, including damage from hail, floods, tornadoes, high winds, and hurricanes
- damage from colliding with animals or birds
- damage from gravel and other flying and falling objects (the company can raise your deductible, however, if you have three such claims in 36 months.)
- towing and labor claims (the company can refuse to renew your towing and labor coverage, however, if you have four such claims in 36 months.)
- other claims or accidents that cannot reasonably be blamed on you, unless you have more than one of these claims in a 12-month period.
Q: My company renewed my policy but moved it to another company. Can it do that?
A: Yes, but only if it gives you 30 days´ notice that your original policy will not be renewed and complies with
other non-renewal conditions. If the company fails to give 30 days´ notice, TDI can require renewal for another year in your original company.
An insurance company cannot deny, refuse to renew, limit, or charge more for coverage because of your race, color, religion, or national origin.
A company also cannot deny, refuse to renew, limit, or charge more for coverage because of your age, gender, marital status, geographic location, disability,
or partial disability unless the refusal, limitation, or higher rate is "based on sound underwriting or actuarial principles." This means the company
would have to show valid evidence that you present a greater risk for a loss than others it is willing to insure.
In addition, a company cannot unfairly discriminate between individuals of the same rate or risk class in its rates, policy terms, benefits, or in any other
manner unless the refusal, limitation, or higher rate is "based on sound actuarial principles."
You may sue insurance companies for unfair discrimination, including denial of insurance, and collect up to $25,000 in civil penalties if you win. The suit
must be filed in an Austin district court. However, if the court finds the suit groundless, in bad faith, or brought for the purpose of harassment, you may be
ordered to pay the insurance company's legal expenses.
Being labeled "high risk" makes it harder to get car insurance, particularly at favorable prices.
If you have tickets and accidents on your driving record, many companies will classify you as high risk. Insurance companies often check motor vehicle
records for your driving history and credit reports for your financial history before writing or renewing your policy. Owning a car built for speed also can
label you as high risk.
Many companies use the Comprehensive Loss Underwriting Exchange (CLUE®) to learn an
applicant's insurance claims history. If the company based its decision
even partly on a CLUE® report, you can get a free copy by calling the Equifax Insurance Consumer Center toll-free at 1-800-456-6004.
Before calling, get the CLUE® reference number from the company's denial letter or from the company. Using the reference number will speed the process and
ensure you request the right report.
Accident Checklist
- Call the police if somebody is injured or killed, if a vehicle can't be moved, or if the accident involved a hit-and-run driver. Your uninsured motorist
coverage pays for a hit-and-run accident only if you report the accident to the police.
- Move your car, if possible, to avoid blocking traffic and to protect it from further loss or damage.
- Get the other driver's name, address, telephone number, license plate number,
driver's license number, and insurance information. Give the other driver
the same information about you.
- Record the insurance company name and the policy number exactly as shown on the other
driver's proof-of-insurance card. Similar company names can cause
confusion, so make sure you write down the correct company name.
- Get the names, addresses, and telephone numbers of any witnesses to the accident.
What does my policy require me to do after an accident?
- Notify your insurance company promptly. Give names and addresses of witnesses and injured persons.
- Promptly send the company copies of notices or legal papers you receive about the accident.
- Cooperate with the company's investigation. You might have to submit a proof-of-loss form and undergo a medical examination.
Q: When should I notify my insurance company?
A: Notify your insurance company immediately, while details are fresh in your mind. Your company probably has a 1-800
number. If not, call your agent. Some agents have authority to settle small claims. The company will advise you about seeing an adjuster and getting repair
estimates. Remember to have your seatbelts and airbags inspected and to ask the insurance company to include necessary repairs to them as part of your claim.
If you report a claim by phone, follow up in writing to protect your rights under the Texas´ prompt-payment-of-claims law.
Q: If the other driver caused the accident, what should his or her insurance company pay?
A: The company should pay the amount for which the at-fault driver is legally responsible, up to the
policy's limits.
The other driver's insurance company should pay:
- your medical and hospital bills
- wages lost because of an injury
- car rental while your automobile is being repaired
- repair or replacement of your car, up to its actual cash value
- compensation for pain and suffering if anyone is hurt.
Q: What if the other driver's insurance
isn't enough to pay all my medical bills?
A: If the other driver's liability insurance
won't cover all your medical bills, file a claim for the difference
against your Personal Injury Protection (PIP) coverage, if you have it. For amounts over that, you can claim against your uninsured/underinsured motorists (UM/UIM)
coverage or your health insurance policy.
Q: If I have only liability insurance, does my policy pay my medical and car repair bills?
A: No. Your liability insurance pays only for other
people's injuries and property damage if you cause an
accident.
Q: The company is totaling my car. How can I make sure I get what
it's worth?
A: An insurer totals a car if repairs would cost more than it is worth. An insurer typically will value your car by
the National Automobile Dealers Association Used Car Guide or by a "market survey" showing average prices of various makes and models. The
company's offer might not recognize your cars condition, special features, or value on the local market. A company is more likely to raise its offer if you can
show that your car would sell for a higher price in your area. Get several used car dealers´ written price quotes for a similar automobile. Newspaper used-car
ads also can build your case.
Q: The insurance company wants to total my car; but I want to fix it. What can I do?
A: You can keep your car if you are willing to subtract its salvage value from the insurance settlement. However,
first make sure the cost to repair the car will not exceed the cars actual cash value. To find out the salvage value, contact local salvage yards for
estimates. Be sure to record the yards telephone numbers and the names of the people you spoke with.
Q: What is actual cash value, and how does it affect my claim?
A: Insurance pays for repairs or replacement only up to a cars actual cash value - the amount it would have sold for
before the accident. The amount offered might be less than you owe on your car loan. In this case, you must be prepared to negotiate to get what you feel is a
fair deal if your car is "totaled."
Q: What if my insurance company totals my car but we cannot agree on the amount to be paid by my collision
coverage?
A: You can demand an appraisal of the loss to resolve a dispute over the amount of a claim. Appraisal allows you and
the company to hire separate damage appraisers. (See "Auto Damage Appraisers" in the Yellow Pages.) The two appraisers choose a third appraiser to act
as an umpire. The appraisers then review your claim, and the umpire rules on any disagreements. The appraisal decision is binding, but only as to the amount of
the loss. If there is a dispute over what is covered, you can still pursue a settlement of the coverage issue after the appraisal takes place. You are required
to pay for your appraiser and half of the umpires costs. Appraisal is available only in disputes between you and your insurance company. It is not
available if the other driver was at fault and you disagree with his or her company's
offer.
Q: Can an insurance company tell me where to get my car fixed?
A: No. The insurance company is required to notify you of your freedom-of-choice rights regarding a car repair shop or
car parts.
On collision and comprehensive claims, however, your company is obligated to pay only for parts of "like kind and quality" to those that were damaged.
Q: Do I get a rental car while mine is being fixed?
A: If the other driver was to blame, his or her liability insurance will pay for a rental car.
If the accident was hit-and-run or the other driver was uninsured and at fault, your UM/UIM property damage coverage will pay.
If your car was stolen and you have comprehensive insurance, your company will provide $20 per day, up to a maximum of $600, for a rental car.
If the car is being fixed or replaced for some other reason, your insurance company
won't provide a rental car unless you have rental reimbursement
coverage.
Q: The other driver's insurance company wants me to sign a release. How long can I delay this?
A: Don't sign until you are satisfied with your total settlement. Get a letter from your doctor estimating the cost
and length of your future medical treatment. You might want to consult an attorney before accepting a settlement. Under Texas law, you have two years after an
accident to either settle your claim or file a lawsuit.
Q: Can the other driver's insurance company delay paying for my car repairs to pressure me into signing a release
on my injury claim?
A: No. Texas law prohibits this unfair tactic. If it occurs, you have the right to file a formal complaint with TDI.
Q: How long can my company take to pay my claim?
A: Texas´ prompt-payment-of-claims law sets these deadlines:
- The company must respond within 15 days after receiving your claim in writing. It probably will ask you to document your loss.
- After you submit any requested documentation, the company has 15 business days to accept or reject your claim.
- Once the company agrees to pay your claim, it must send your check or draft within five business days.
A company that cannot meet these deadlines must send you a notice explaining why. The company then has 45 days to either approve or reject the claim.
Note: This law does not apply if another driver's insurance company is paying for your accident. However, the company is required to act in good
faith and to make a prompt and fair settlement.
Q: The other driver's insurance company
won't pay because the driver denies fault. The police did not
investigate the accident, but I have two eyewitnesses. What can I do?
A: It's important to get names, addresses, and telephone numbers of any witnesses to the accident. If the other
driver denies fault, make sure insurance company knows about the witnesses. Independent witnesses could make a difference.
Q: I'm getting nowhere with the other
driver's insurer but I'm afraid to file a claim against my own company
because it might raise my rates or refuse to renew my policy when it expires. Any advice?
A: Talk to your agent or your company's
claims or underwriting department about how a claim might affect your rates
or renewal. A company can raise rates because of certain accidents but not if you were not at fault. A company cannot refuse to renew your policy solely because
of one not-at-fault accident in a 12-month period. If the accident affected your Texas Department of Public Safety (DPS) driving record, your company may
consider that in determining your rates, whether you made a claim or not.
Q: Do I get an explanation if the company refuses to pay my claim?
A: Texas law requires your company to explain in writing why it rejected your claim.
Don't take the company's word that your claim isn't covered. Ask to see the policy language that supports denial of your claim. A court usually will order
the company to pay if the language is unclear and the policy reasonably could be read your way.
Q: What do I do if the other driver refuses to tell me his or her insurance company?
A: If the police investigated, get the accident report. If an officer did not investigate, you can report the
driver's refusal to the police. This could result in a report identifying the driver's
insurance company. In addition, DPS keeps files of forms - called
SR-22s - that show the insurance companies of people convicted of DWI or driving without insurance.
DPS will advise you how to find out if the driver has an SR-22 on file and the name of his or her insurance company. You may also request the information by
writing or calling DPS
- Texas Department of Public Safety
- Safety Responsibility
- P.O. Box 4087
- Austin, Texas 78773-0330
- 512-424-2600
If you are under 18, you must complete a driver training course approved by DPS to obtain a Texas
driver's license. Most insurance companies give a 10
percent driver training credit for teen-agers who complete driver education. Parent-taught drivers are eligible for the discount if the parent used a DPS-approved
course. County mutual insurance companies are not required to offer this discount.
Q:
My parents are going to buy me a car for graduation. Would it be better to put the title in their
name or in mine?
A: It depends. If the car title is in your name, you will need to show proof of your own insurance policy. This costs more
than having the car on your parents´ policy.
Q: I'm going to college in another state, and my car is registered in Texas. Am I still covered by my
(or my parents´) Texas policy?
A: Yes. Your company may adjust your premium because rates are based on where your car is usually located. You also
should find out about the auto liability insurance requirements of the state where you attend college.
Q: I'm enlisting in the military after high school. Does my Texas policy still cover me if
I'm stationed in another state?
A: Yes. Your Texas policy will automatically meet any other states liability insurance requirement. At renewal, you
may be required to buy insurance in the state where you're stationed.
Q: My teen-ager just received his
driver's license (or learners permit). Do I have to put him on my
policy?
A: Your policy covers children living at home or away at school, even when not named on your policy. Because the
company is required to charge the correct rate, based on the classifications of the drivers in your family, you should add your children to your policy. If the
company learns about them later - because of an accident claim, for instance - the company will bill you for the extra premium you should have paid.
Q: My parents want to add me to their insurance policy, and their company is telling them it
won't renew their policy. Can the company do this?
A: No. A company cannot refuse to renew a policy just because of a covered persons age.
Q: My daughter is going away to college, and I want to remove her from my policy. Can my company force
me to keep her on the policy?
A: Yes. Technically, you could drop her with a "named driver exclusion" endorsement. Few companies will
agree to this, however. Besides, it's risky to drop coverage when your teen-ager might occasionally drive at school or when home on visits.
Q: Does my teen-ager have to be rated on the most expensive vehicle?
A: Not necessarily. The rules on this are complex and address a variety of situations. Generally, if a teen-ager is
the "principal driver" of an automobile, his or her rate will go on that car. If not, the teen-age driver is assigned to the car (usually the most
expensive) that produces the highest rate.
Q: My 20-year-old son no longer lives with me. The company still wants to have him on my policy. What can I
do to take him off the policy?
A: Use documents like his driver's license, lease agreement, or utility receipts to prove that your son has moved. A
remotely possible alternative would be a named driver exclusion added by mutual agreement between you and the insurer.
Q: Can I purchase a non-owner policy for my teen-ager and exclude him from my policy?
A: This usually is a bad idea. A non-owner policy merely provides additional liability insurance when driving a
non-owned vehicle. If your teen-ager has an accident while driving your car, neither your policy nor the non-owner policy will pay for your
vehicle's damage.
You might also be unprotected financially if held liable for an accident caused by your minor child. Finally, if the non-owner policy is rated properly, your
teenagers liability insurance might cost as much as or more than it would cost if he was on your policy.
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