Understanding Your Insurance Policy Explained

Texas law requires people who drive in Texas to pay for the accidents they cause. Most drivers do this by buying auto liability insurance. Liability insurance pays to repair or replace the other driver’s car and pays for the other person’s damages when you are at fault in an accident. The law currently requires minimum liability coverage of $30,000 per injured person, $60,000 for everyone injured in an accident, and $25,000 for property damage (30/60/25).

The declaration page on your auto insurance policy indicates the details of your coverage. Coverage is the amount of money the insurance company will pay in case of an incident. The amount of coverage you want to purchase is different if you use your vehicle for personal use rather than commercial use. The language in your auto insurance policy may limit who can drive your vehicle. Also, it may limit the use of the vehicle for certain a purpose. In some cases, the insurance companies expressly exclude high risk drivers from the policy to write a cheaper policy. For example, if you are an Uber driver some of the insurance companies now require that you purchase a commercial auto insurance policy.

Your auto insurance policy language may limit who can drive your vehicle besides you. They may require additional information as to the people who are going to be permitted to drive your vehicle. In case of an incident the auto insurance company may deny you coverage because the individual was excluded on your policy. Some insurance companies specifically require you to provide your spouse’s information in order to issue you a auto insurance policy.

Good practices:

  1. You want to make sure the person driving your vehicle has a valid state license.
  2. You want to make sure you are buying a Standard Texas policy and not non-standard auto insurance policy sold by companies like ACCC, Baja, Elephant, Fred Loya, and other smaller companies.
  3. You may be individually held responsible for the person driving your vehicle. Always make sure they are not driving under influence of alcohol or durgs. Click Here to learn more about Negligence Entrustment.

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