Auto insurance: take a look at your policy

Rusty Babington

Legal Assistance Attorney

At the Fort Bliss Legal Assistance Office we normally have a number of clients who have been involved in auto accidents. Our first question is “Do you have insurance to cover this accident?” 

In order to drive your vehicle in either Texas or New Mexico, you are required by state law to have insurance on your vehicle. The Pass and ID office will not give you base decals unless you show evidence that you currently have insurance. Even if you have insurance, very few of us take the time to review and understand what the insurance policy covers or does not cover. The following is a brief overview of what auto insurance is supposed to provide and what is normally contained in your auto insurance policy.

Generally an insurance policy is a contract between you and an insurance company. You’re obligated to do certain things such as pay your premium on time, notify the insurance company within certain time limits if you have been in an accident, assist your insurance company in the defense of a lawsuit, and not to settle a lawsuit without the insurance company’s permission. The insurance company provides you with legal defense (an attorney) if you are sued, and provides compensation for damages up to the limits of your policy. If the insurance company has a question of whether or not the accident is covered by your policy, they still might provide a legal defense until that issue is resolved.

The law in Texas currently requires you have a minimum coverage of “25/50/25.”  This means you must have at least $25,000 coverage for bodily injury per person for an accident you caused, a total of $50,000 bodily injury for each occurrence or accident, and $25,000 for property damage you caused. This information is normally contained in the declaration page that lists the vehicles covered, the types of coverage, limits of liability, the premium charge for each type of coverage, and the effective dates of coverage. This type of insurance (liability only) meets your financial responsibility required by state law. 

You may increase the amount of coverage and the types of coverage by consulting with your insurance agent. For example, you may want uninsured or under-insured motorist coverage. This would protect you from damages caused by another driver who has no insurance or minimal coverage.  

You may decide to increase the limits of liability coverage. For example, if you have minimum coverage of $25,000 per person and the injured person establishes his personal injury damages are $75,000, your insurance company would pay $25,000 and you would be responsible for the remaining damages of $50,000. Increasing your liability coverage to $100,000/$300,000 would take care of this potential problem. There would be an increase of the premium to pay for such additional coverage. 

You could also have comprehensive and collision coverage, which your insurance company pays for damage to your vehicle and personal property in the vehicle. 

Your policy generally sets out your liability coverage in terms of who is a “covered” person. The policy normally covers you, your family, and those who you have given permission to drive your car or “covered auto”. A covered auto is any vehicle shown on the declaration page of your policy listing all your cars. It may also cover newly acquired vehicles and trailers.

A policy normally covers accidents in other states and may cover rental vehicles both in the United States and overseas. Any coverage for rental vehicles is normally for only 30 days or less. Some companies provide supplemental payments in case you damage a government owned vehicle up to one month of your base or basic pay. Your auto policy could also provide for medical payments to cover medical expenses to you or any family member, passengers in your vehicle or medical expenses caused by another vehicle where you or your family is injured. There may be coverage for lost wages caused by the accident.  

Each of us need auto insurance to provide us with basic financial protection if we are involved in an auto accident. The type and amount of coverage is a decision you must make after looking at your family, your vehicles, your income and after talking with insurance agent.  Finally, you need to read your policy to find out what is covered and what is not covered, because each policy may be different from another. 

If you have questions, contact your insurance agent and be sure you’ll never again wonder, “do I have insurance to cover this accident?”