The law of the land in Texas requires motorists to have automobile liability insurance, this is the type of insurance that pays for another person's expenses if you cause an accident. Minimum coverage in our state is $25,000 per injured person, with $50,000 for all injured persons in the same incident. The shorthand for this coverage is 25/50. Minimum coverage requirements increased to 25/50/25 ($25,000/$50,000/$25,000) in 2008 and 30/60/30 in 2011.
In theory, every driver on Texas highways is covered by liability insurance to protect other drivers. In reality, some people drive without insurance, or they hit and run, or, even if they have the minimum coverage required by law, it is not enough to cover the other driver's damages. This is where uninsured coverage and underinsured coverage come in.
An uninsured driver is someone who either has no insurance or who hits and runs. An underinsured driver is one who does have liability insurance, but in an amount that is not enough to cover the other driver's damages in a particular situation. For example, a negligent driver might have 20/40/15 minimum coverage but be found liable for $40,000 in damages to you individually. If you have underinsured coverage, it would pay the $20,000 difference.
Texas law gives you the opportunity to buy insurance coverage to protect yourself against both uninsured and underinsured motorists. This coverage is optional, but your insurer must offer you the opportunity to purchase it, and your refusal to purchase it must be in writing. This coverage protects you, your family members, passengers in your vehicle, and anybody driving your vehicle with your permission. It pays your medical and funeral expenses, car repairs, car rental, the replacement of damaged contents, lost wages, pain and suffering, disfigurement, and permanent or partial disability up to the dollar limits that you have purchased.
You can buy uninsured or underinsured motorist coverage in the minimum amount or in a larger amount up to the dollar limits of your liability policy. If you are not sure what choice you made when you were offered the opportunity to buy this coverage, talk to your insurance agent.
Your liability coverage protects you from having to pay damages to someone if you cause an accident. Your liability policy will not pay your expenses resulting from an accident with an uninsured or underinsured motorist. Uninsured motorists often have few assets, and you could face significant financial hardship if you do not have this coverage and you are injured by such a driver.
Even if the other driver has liability insurance, it may be only the minimum amount, and this coverage can quickly be exhausted. Medical care is expensive. The replacement cost of even a single vehicle easily can be $30,000 or more. Your underinsured coverage kicks in to pick up all or part of the difference once the other person's liability limits are exhausted.
Purchase at least the minimum amount of both uninsured and underinsured motorist coverage. If possible, have as much uninsured and underinsured coverage as you have liability coverage. This may be your only protection against uninsured and underinsured motorists.
