Laws and regulations differ across jurisdictions, and insurance law is no exception.
Generally, states fall into two categories: fault states and no-fault states. Each state decides whether to require no-fault insurance.
Texas Insurance Law: A Fault-Based System
In Texas, the insurance system is fault-based. This means that Texas does not use a no-fault insurance system.
What does this mean for you if you’ve been in a car accident?
It means the person responsible for the accident is liable for damages. As one of 38 at-fault states, Texas requires the at-fault party to compensate the injured party for the damages they caused.
Understanding ‘At Fault’
The term “at-fault state” affects insurance company responsibilities rather than involving court cases directly. In fault states, insurance companies pay damages based on each state’s minimum coverage requirements, known as financial responsibility laws. These damages include medical bills, lost wages, and property repairs.
Texas Minimum Liability Coverage
At-fault states like Texas require minimum liability coverage. The minimum coverage in Texas, known as 30/60/25 coverage, includes:
- $30,000 for each injured person
- Up to $60,000 per accident
- $25,000 for property damage per accident
This minimum coverage might not fully cover all damages, and if damages exceed the at-fault driver’s insurance limits, the injured party can sue for the difference. Texas follows a Modified Comparative Negligence rule, meaning if the injured party is found to be at least 51% at fault, they cannot recover any damages in court.
No-Fault States: A Different Approach
In contrast, no-fault states require each party to cover their own costs through personal injury protection (PIP) insurance. In these states, each person’s insurance covers their damages, and collision coverage can be obtained for property damage.
Overview: Types of Insurance
Liability Coverage—Liability coverage is the most common type of insurance, required by most states. It covers:
- Bodily Injury Liability: Costs associated with injuries to others.
- Property Damage Liability: Costs for damages to another person’s property.
Uninsured & Under-insured Motorist Coverage—This insurance covers you if you’re struck by a motorist with little or no insurance. It can assist with:
- Medical bills
- Repair costs (in some states)
Texas does not require this coverage.
Collision Coverage—Collision coverage helps if you:
- Are involved in an accident with another vehicle
- Strike a large object
It assists with repairs or, in extreme cases, vehicle replacement.
Comprehensive Coverage—Comprehensive coverage is for damages from:
- Fire
- Vandalism
- Theft
It covers repair or replacement up to the property’s cash value.
Personal Injury Protection (PIP)—PIP covers medical bills and related expenses from an injury, such as:
- Lost income
Medical Payments Coverage—Medical payments coverage helps cover medical expenses for:
- Yourself
- Passengers in your vehicle at the time of the accident
Gap Coverage—Gap coverage is optional and helps cover the cost of an auto loan if your vehicle is totaled or stolen. It’s typically available if:
- You are the original leaseholder
- The car/truck is new
Other Insurance Types—Additional insurance options include:
- New car replacement coverage
- Towing/labor cost coverage
- Ride-sharing coverage
In Texas, the at-fault party is responsible for damages resulting from a car accident. The at-fault party’s insurance provider, or other applicable methods, must cover these damages and injuries.
Have You Been In An Accident? Call Funk
Funk and Associates is a Austin personal injury law firm that has been helping Austin-area accident victims navigate tricky insurance issues for more than 20 years. The practice areas we focus on include:
- 18-Wheeler Accidents
- Car Accidents
- Motorcycle Accidents
- Wrongful Death
- Traumatic Brain Injury
- Product Liability
If you have been injured in an accident in Austin, TX, contact us for a free, no-obligation consultation at 512-472-3865.
