The Basics of Auto Insurance
An auto insurance policy is actually a contract between you and your insurer. Texas requires all personal automobile policies to offer minimum limits of liability of:
- $30,000/$60,000 Bodily Injury and $25,000 Property Damage
In addition to offering the minimum required limits, Standard Insurance offers other limits to fit your insurance needs.
Liability Insurance: Liability is the coverage that will pay for bodily injury and property damage caused to a third party as a direct result of negligence by an insured driver. Liability is required in order to operate a motor vehicle inside the state of Texas. The Property Damage portion of liability pays for the repair or replacement of the actual damage done to someone else’s property. Bodily Injury coverage is the portion of liability that will pay for injuries to others as a direct result of negligence by an insured driver.
Comprehensive & Collision Coverage: Collision coverage protects your insured vehicle in the event of an accident whether you are considered at fault or not. Collision coverage pays for damage to your vehicle in the event your vehicle is damaged by an uninsured or underinsured motorist.
Comprehensive coverage will pay for damages to your vehicles that result from causes other than a collision. These may include damages from theft, fire, vandalism, natural disasters or striking an animal.
Replacement Cost vs Actual Cash Value: Texas Personal Automobile Insurance policies are issued on an Actual Cash Value basis unless otherwise stated.
Actual Cash Value is the amount it would take to replace your vehicle or repair damages to your vehicle with materials of similar kind and quality factoring for depreciation. Depreciation is the decrease in vehicle value because of age or wear and tear.
Replacement cost is the amount it would take to replace your vehicle or repair damages with materials of similar kind and quality without factoring for depreciation. Depreciation is the decrease in vehicle value because of age or wear and tear.
Uninsured Motorists Coverage: Uninsured Motorists coverage pays for your damage incurred if you’re struck by someone who doesn’t have auto insurance. This coverage is not required in Texas.
Underinsured Motorists coverage will also protect you if the driver who causes more damage than his or her liability coverage can cover.
PIP & Add-on Features:
PIP coverage: Personal injury protection is a form of medical payment protection that is not required in Texas.
Add-on Features: Supplemental auto coverage features are sometimes available, as separate premium items. 1. Towing and Labor covers charges in case of a vehicle breakdown.