Texas Department of Insurance 

Auto Insurance Coverages


Depending on the types of coverage you have, auto insurance pays for car repair or replacement, medical expenses, rental cars, towing, court costs, and other expenses. Exclusions are the things your policy doesn't cover. The following are some common exclusions:


  • Named driver. Some policies cover only household residents specifically named on the policy.
  • Excluded driver. Excludes coverage for people specifically named in an endorsement to your policy.
  • Racing. Excludes coverage if you use your car in a racing event.
  • Ride-booking. Most policies exclude coverage when you’re using your car for a ride-booking service like Uber or Lyft. Some insurance companies offer policies specifically for drivers for ride-booking companies.
  • Intentional acts. Excludes coverage for losses that were intentional.

The front page of your policy – called the declarations, or dec, page – shows the exact name of your insurance company, your policy number, and the amount of your coverages and deductible. Many insurance companies use the Texas Personal Automobile Policy, a standardized policy form that offers eight types of coverages. 


1. Liability Coverage

What it pays: The following expenses, up to your policy's dollar limits, for the people in the other car involved in an accident that you or someone covered by your policy caused:  

  • medical and funeral costs, lost wages, and compensation for pain and suffering;
  • car repair or replacement costs; and
  • car rental for the other driver while their car is being repaired.

Liability insurance also pays your defense costs, including attorney fees if someone sues you because of the accident. 


2. Collision Coverage

What it pays: If the insurance company decides your car can be fixed, it will pay you the cost of repairs. If the company totals your car, it will pay you the actual cash value of your car. Actual cash value is the current value of your car, minus depreciation. Whether the company decides to repair your car or total it, you’ll get only up to the dollar limits of your policy. Your policy’s dollar limits are shown on the declarations page of your policy. 

Who it covers: You, your family members, and anyone else insured under your policy 


3. Comprehensive Coverage

What it pays: The cost of replacing or repairing your car if it’s stolen or damaged by fire, vandalism, hail, falling objects, or an event other than a collision. Comprehensive coverage might pay for a rental car. Your policy won't pay to replace a stolen car unless you report the theft to police. Payment is limited to your car's actual cash value, minus your deductible.     


4. Medical Payments Coverage

What it pays: Medical and funeral bills resulting from an accident. 

Who it covers: You, your family members, passengers in your car, and other injured people, including bicyclists and pedestrians, regardless of who caused the accident.     


5.Personal Injury Protection (PIP) Coverage

What it pays: Similar to medical payments coverage, plus 80 percent of lost income and the cost of hiring a caregiver for an injured person. 

Who it covers: You, your family members, and passengers in your car, and other injured people, regardless of who caused the accident. Your insurance company will automatically give you PIP coverage, but you may reject it in writing if you don’t want it. The company must offer you $2,500 in PIP coverage, but you can buy more from most companies.     


6. Uninsured/Underinsured Motorist (UM/UIM) Coverage

What it pays: Your expenses from an accident caused by an uninsured motorist, a motorist who did not have enough insurance, or a hit-and-run driver. Also pays for personal property that was damaged in your car. There is a mandatory $250 deductible for property damage. This means you must pay the first $250 of the expenses yourself before the insurance company will pay. There are two types of UM/UIM coverage:  

  • Bodily injury UM/UIM pays for medical bills, lost wages, pain and suffering, disfigurement, and permanent or partial disability. There is not a deductible with this type.
  • Property damage UM/UIM pays for auto repairs, a rental car, and damage to items in your car.

Who it covers: You, your family members, passengers in your car, and others driving your car with your permission. Insurance companies must offer UM/UIM coverage. If you don't want it, you must reject it in writing. 


7. Towing and Labor Coverage

What it pays: Towing charges when your car can't be driven. Also pays labor charges, such as changing a flat tire or jump-starting your battery.  


8. Rental Reimbursement Coverage

What it pays: A set daily amount for a rental car if your car is stolen or being repaired. Your company only pays for rental reimbursement if your car was damaged by something that your policy covers, such as fire or theft.