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Texas Financial Responsibility Law: Car insurance requirements

February 12, 2010

Under Texas law, any person who drives in Texas must be able to pay for the car accidents they cause. The vast majority of drivers in Texas meet the financial responsibility requirement by purchasing automobile liability insurance.

If you are in a car accident, your liability insurance will cover the cost of repairing or replacing the other driver’s vehicle. It will also pay the medical expenses for the driver or other people injured in the accident.

The minimum amount of liability insurance coverage required to satisfy the Texas Financial Responsibility Law is $25,000 for each injured person, up to a total of $50,000 per accident and $25,000 for property damage.

Note that these requirements are set to increase on January 1, 2011. The new minimum requirements will be $30,000 for each injured person, up to a total of $60,000 per accident and $25,000 for property damage.

Texas law requires that you provide proof of financial responsibility in the following situations:

  • When registering a vehicle or renewing your vehicle’s registration
  • When obtaining or renewing your driver’s license
  • When you are asked for it by a law enforcement officer during a traffic stop or at the time of an accident

In Texas, approximately 20% of the motor vehicles on the roads have no insurance coverage – that’s equal to one out of every five cars. Driving without the proper insurance in Texas is a bad idea. If you are caught driving without adequate liability insurance coverage, you could face hundreds of dollars in fines and even a suspension of your license.

For helpful information on shopping for car insurance in Texas, visit the Texas Department of Insurance website.



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