In the United States, we have “fault-based insurance states” and “no-fault insurance states.” Texas is a fault-based state, which means people are responsible for the accidents they cause. Of course, Texas law requires that drivers purchase auto insurance so they can hopefully afford to pay for these accidents, but what if an at-fault driver is uninsured?
You are diligent in paying your auto insurance premiums every month. After all, it’s the LAW and you don’t want to suffer the consequences by being uninsured. So, if you’re ever in a crash with another driver who is at-fault, your biggest fear may be that they allowed their auto insurance to expire, or that they were never insured to begin with. If your worst fear comes true, are you on the hook for the accident?
Uninsured Motorist Coverage
As a Texas driver, you are required by law to have basic liability coverage and it’s recommended that you purchase collision and comprehensive coverage, and Personal Injury Protection (PIP) – the most you can afford. But there’s another type of coverage that is not mandatory, but you should make sure you have it: uninsured/underinsured motorist (UM/UIM) coverage.
But what does it pay? According to the Texas Department of Insurance, it pays: “Your expenses from an accident caused by an uninsured motorist, a motorist who did not have enough insurance, or a hit-and-run driver. Also pays for personal property that was damaged in your car.
“There is a mandatory $250 deductible for property damage. This means you must pay the first $250 of the expenses yourself before the insurance company will pay.”
UM/UIM coverage is broken down into bodily injury UM/UIM and property damage UM/UIM. It covers you, your passengers, your family members, and others who may drive your car with your permission.
Note: Insurance companies are required to offer UM/UIM coverage to all policyholders, so if you don’t want it, they have to get you to reject the coverage in writing.
If you do not purchase UM/UIM coverage and you’re hit by an uninsured motorist, you could be out of luck. Unless the at-fault driver has significant assets, you may not have anyone to sue for your medical bills, property damage and other losses.
Related: What is an Auto Insurance ‘Exclusion’?