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How to Read Your Insurance Policy

Almost every state in the country requires its drivers to have liability insurance before operating a car. Texas requires that drivers carry at least “20/40/15” insurance. This means that if you’re in n accident, your insurance will pay a maximum of $20,000 for one person injured in the crash and a maximum of $40,000 for all injuries caused by the crash. The $15,000 is the maximum amount of property damage that your insurance company will cover.

But, if you are in a serious accident, your damages will likely be much more than 20/40 will cover.

Personal Injury Protection: Texas does not require drivers to carry Personal Injury Protection (PIP) coverage or uninsured motorist coverage. PIP coverage pays for your own medical expenses, lost wages, and other costs when you’re in an accident.

Collision Coverage: This pays for damage done to your own car in an accident, no matter who caused the accident.

Comprehensive Coverage: This pays for damage done to your car when you’re not in an accident. If your car is vandalized, stolen, or hit by disasters like fire, flood, or hail, your comprehensive coverage should pay for the damage.

Uninsured and Underinsured Motorist Coverage: Texas does not require you to carry this type of coverage, but it’s a good idea. If you are hit by an uninsured driver, this coverage pays for your medical expenses, lost wages, etc. Likewise, if you are hit by a driver whose insurance is too small to cover your injuries, the underinsured motorist coverage will make up the difference.

Shop Around: Almost every insurance company with a website will offer you a free quote. If you have questions about the coverage, call and ask to speak to a representative.

Review the Policy: Always review your policy before you sign anything. This article from Edmunds is helpful in policy review.