Types of Auto Insurance in Texas
Understanding the types of auto insurance available in Texas is essential for building the right policy and protecting yourself legally and financially. This guide explains all major coverage types—required and optional—so you can make informed decisions for your situation.
Core Types of Auto Insurance Coverage
1. Liability Insurance (Required by Texas law)
Liability insurance pays for injuries and property damage you cause to others in an at-fault accident. It is the only coverage required by Texas law.
- Bodily Injury Liability: Covers medical expenses, lost wages, and legal fees for others injured.
- Property Damage Liability: Pays to repair or replace another person's vehicle or property.
- Texas Minimums: $30,000 per injured person, $60,000 per accident, $25,000 property damage (details)
If damages exceed your limits, you pay the difference out of pocket. Higher limits are recommended for most drivers.
2. Collision Coverage (Optional, often required by lenders)
Collision coverage pays for damage to your own vehicle after a crash, regardless of fault. It covers repairs or the actual cash value (ACV) of your car if totaled.
- Required by most lenders if your car is financed or leased.
- Deductible applies—choose your amount ($250, $500, $1,000, etc.).
- Does not cover mechanical breakdown or normal wear and tear.
Collision is highly recommended for new, valuable, or financed vehicles.
3. Comprehensive Coverage (Optional, often required by lenders)
Comprehensive coverage insures your vehicle against damage not caused by a collision, such as:
- Theft, vandalism, and break-ins
- Hail, flood, tornado, fire, or falling objects
- Animal collisions (e.g., hitting a deer)
Comprehensive is usually required for leased/financed vehicles and is valuable for high-risk areas (e.g., hail-prone Texas cities).
4. Uninsured/Underinsured Motorist (UM/UIM) Coverage
UM/UIM coverage protects you if you’re hit by a driver with little or no insurance. In Texas, about 1 in 8 drivers is uninsured.
- Uninsured Motorist: Covers your injuries and vehicle damage if at-fault driver has no insurance.
- Underinsured Motorist: Pays when the at-fault driver’s insurance isn’t enough to cover your costs.
- Can cover hit-and-run incidents.
UM/UIM is optional but highly recommended, especially in Texas urban areas. You must reject it in writing if you don’t want it.
5. Personal Injury Protection (PIP) & Medical Payments (MedPay)
PIP and MedPay help pay your medical expenses after a crash—regardless of fault.
- PIP: Covers medical bills, lost wages, and essential services. Minimum $2,500, but higher limits available.
- MedPay: Pays for medical expenses only. No deductible or copay, but no wage coverage.
Texas insurers must offer PIP, but you can reject it in writing. It’s valuable for families and drivers without robust health insurance.
6. Additional & Specialty Coverage Types
- Rental Reimbursement: Pays for your rental car while yours is in the shop after a covered claim. (Learn more)
- Roadside Assistance: Covers towing, jump starts, flat tires, and lockouts.
- GAP Insurance: Pays the difference between your car’s value and what you owe if your car is totaled. (See GAP Insurance)
- Accident Forgiveness: Prevents your first at-fault accident from increasing your rates. (How it works)
- New Car Replacement: Replaces your new car with a brand new one if totaled soon after purchase.
- Custom Parts & Equipment (CPE): Covers aftermarket upgrades not included in standard coverage.
- OEM Parts Coverage: Ensures repairs use original manufacturer parts.
- Rideshare Insurance: Fills gaps if you drive for Uber, Lyft, or delivery. (More)
- Usage-Based (Telematics) Insurance: Rates based on your driving via app or device (Details)
- Non-Owner Car Insurance: Liability coverage when you don’t own a car but drive others (Learn more)
See all Texas add-ons for more options.
Texas Coverage Scenarios: Which Types Do You Really Need?
- New, Financed, or Leased Vehicles: Need liability, collision, comprehensive, and usually GAP coverage. Lender may require you to carry add-ons like OEM parts or new car replacement.
- Older, Paid-Off Vehicles: May choose liability only, but collision/comprehensive are smart if the car is worth more than $5,000.
- Families with Young Drivers: Higher liability limits, PIP, and UM/UIM are highly recommended. See young driver guide.
- Urban Drivers (Houston, Dallas, etc.): Consider comprehensive (theft/hail), UM/UIM, and rental reimbursement.
- Rideshare or Delivery Drivers: Need special rideshare coverage to avoid claim denials.
- Low-Mileage or Retired Drivers: Ask about usage-based discounts and consider reducing optional coverages.
Tip: Use our Coverage Needs Quiz to match coverages to your situation.
How to Compare Coverage Types & Find the Best Policy
- Review your needs: Vehicle age, loan/lease status, budget, risk tolerance.
- Get quotes for different combinations: Ask for liability only, full coverage, and add-ons.
- Check the Coverage Comparison Table to see what each type covers and scenarios for using them.
- Ask about discounts: Safe driver, multi-car, bundling, telematics, and more. See Discounts & Savings.
- Consider the claims process and customer service: Not all companies handle claims the same way.
Frequently Asked Questions About Texas Auto Insurance Types
Liability only pays for damages you cause to others, as required by Texas law. Full coverage includes liability, plus collision and comprehensive (covering your car), and often UM/UIM and PIP. Lenders usually require full coverage for financed/leased cars. See full table.
Texas insurers must offer PIP and UM/UIM, but you can reject them in writing. Lenders may require specific add-ons. Choosing Coverage Guide.
These add-ons are inexpensive and can save you hundreds if you need a rental or emergency tow. Ideal for drivers who rely on their car daily or travel frequently. Explore Add-Ons.
Usage-based (telematics) insurance tracks your driving via app/device. Safe, low-mileage drivers may save 10-40%. It’s popular for young drivers and those who drive less. See Usage-Based Insurance.
Consider a non-owner car insurance policy for liability protection when you rent, borrow, or use car-sharing services. Learn More.
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Did You Know?
Texas law only requires liability, but full coverage is strongly recommended for most drivers. The right mix of coverages can protect your finances, your vehicle, and your peace of mind.
Guide: Choosing Coverage