June 4, 2019 | News & Blog
It’s important to make sure you have the right kind of automobile insurance before an accident happens. This article will provide a Texas auto insurance law overview and hopefully help you decide which type of coverage is best for you.
The liability portion of your automobile insurance policy tells you who is covered and what is covered by the policy. The policy will list the insured person(s) and the insured vehicle(s).
The standard liability policy covers the named insured (the person who buys the insurance), their spouse, any family member, and anyone using the covered vehicle with the insured’s permission.
A family member is someone who resides in the household and is related by blood, marriage, or adoption. A family member includes someone who is temporarily absent from the household as long as they have an intention to return. For policy purposes, someone may have more than one residence. For example, a student away at college may have two residences, their dorm room and their parents’ house.
In addition to family members, anyone using the insured vehicle with permission is covered. Permission is determined from the point of view of the user, not the owner or named insured. Therefore, if the user reasonably believes they have permission to use the vehicle, they are covered.
In addition to listing who is covered, the policy may also exclude specific drivers from coverage. This is usually done to get a cheaper insurance rate. The excluded drivers must be listed by name in the policy.
The vehicles listed on the policy are covered, as well as any temporary substitute vehicles. For example, if your covered vehicle is in the shop and you have a loaner vehicle, that vehicle is covered as a temporary substitute vehicle.
The insured also must have an insurable interest in the vehicle for there to be coverage. The most common example of this is when a car is sold but is still listed on the former owner’s insurance policy. If the new owner gets in a wreck, the old policy would not cover the accident because the former owner has no “insurable interest” in the vehicle anymore.
Vehicles that are owned by the insured or other family members but not listed on the policy are not covered.
The minimum policy limits you must carry in Texas are $30,000 for injuries per person/$60,000 for injuries per accident/$25,000 for property damage per accident. This means that the insurance company will pay up to these amounts when their insured is found liable for an accident.
A loss of consortium claim is derivative of a bodily injury claim and does not trigger a separate per person limit. A loss of consortium claim may still be viable under the policy. It will simply make a loss of consortium claim and a separate bodily injury claim subject to the same per person limit. Thus, if person A was injured and person B is claiming loss of consortium based on person A’s injuries, the single per person limit will apply.
Purely emotional damages do not trigger coverage under bodily injury definitions in the policy.
When there are multiple claimants, the insurance company has broad discretion in allocating the policy limits between them.
When two collisions are separated by 2-5 seconds and 30-300 feet, these are two separate accidents under the policy and require the payment of two separate policy limits.
Personal Injury Protection (PIP) is required by statute to be included in any auto policy in Texas unless it is waived in writing. The minimum PIP limits are $2,500. PIP provides coverage for medical bills, lost income, and loss of services ordinarily performed by the injured person.
PIP is payable regardless of fault. In other words, if you cause an accident and you were injured in that accident, you are still entitled to PIP benefits.
PIP covers everyone in the insured vehicle up to the PIP limits. PIP also covers every insured no matter what vehicle they are in.
An insurance company usually does not get credit for paying PIP unless liability payments and PIP payments are coming from the same policy. In that situation, an insurance company may be able to offset the PIP benefits they paid. For example, if a passenger sues a driver for liability and recovers PIP from the driver’s policy, the PIP payment serves as a credit or offset on the liability claim.
PIP benefits must be paid within 30 days of receipt of the claim. The payments under a PIP policy are applicable to any covered losses that are incurred within three years from the date of the accident.
Two separate PIP policies maybe stacked to fully compensate the insured. Within one insurance policy, PIP limits cannot be stacked. Even if multiple policies are available, PIP payments cannot exceed actual damages.
PIP payments must be paid directly to the beneficiary, not to the healthcare provider, unless there’s an agreement signed by the insured.
This coverage is sometimes sold in lieu of PIP, but PIP provides better benefits to the insured. PIP covers 80% of lost income, as well as medical expenses. Also, you don’t have to pay PIP back out of any third-party settlement or recovery. Med Pay covers only medical expenses (not lost income) and you might have to pay it back out of any payments received from the at-fault person’s insurance.
Similar to PIP, uninsured/underinsured motorist coverage (UM) must be included in every policy unless it is waived in writing by the insured. UM coverage serves as sort of a safety net. If the at-fault driver has no insurance or insufficient insurance to cover all the damages, the UM coverage steps in to provide additional funds to compensate the injured person. Like PIP, UM benefits cover everyone in the insured vehicle up to the amount of the UM limits. Also like PIP, UM coverage extends to all of the insureds under the policy, whether they are in a covered vehicle or not. Exceptions to this general rule are exceptions that apply throughout the policy, such as using a vehicle without permission, use of an owned vehicle not listed on the policy, etc.
Everyone in the insured vehicle is covered as long as they are occupying the covered vehicle when the accident occurs.
However, the insureds under a UM policy have even broader coverage. The insureds are covered regardless of the circumstances, as long as an uninsured motor vehicle causes the injury. Thus, the insured is not required to be in a vehicle to be covered. UM protection covers the insured and the family members while riding in uninsured vehicles, commercial vehicles, while pedestrians, or while on their front porch. The only requirement is that the insured is injured by an automobile driven by an uninsured motorist. This is one of the reasons UM coverage is well worth the nominal additional expense.
The burden is on the insured to show the uninsured driver was negligent. The burden shifts to the insurance company to show the contributory negligence of the insured. This sometimes results in the odd situation of an insurance company trying to prove their own insured caused the accident.
When a vehicle is repairable, the at-fault driver‘s insurance owes the cost of repairs and the loss of use of the repaired vehicle while it is disabled. The plaintiff may recover for loss of use even without renting a substitute vehicle.
An insurance company that pays a total loss on a vehicle which is in the storage facility is also liable to the owner of the facility for telling in storage cost.
Your own insurance company is not required to use OEM (original equipment manufacturer) parts but must use those of like kind and quality.
In a situation where more than one insurance policy may apply, the insurance policy covering the vehicle is primary and the insurance policy covering the driver is excess.
If you or someone you know has been injured in an accident, contact us today! We are familiar with Texas auto insurance law and have actual experience working inside the insurance industry. The consultation is 100% free, and you don’t pay us unless we win your case.