3.1 Texas Auto Insurance Requirements
Key Takeaways
- Texas mandatory auto liability is 30/60/25: $30,000 bodily injury per person, $60,000 bodily injury per accident, and $25,000 property damage - memorize these exact figures
- Texas is an at-fault (tort) state using proportionate responsibility (modified comparative fault) with a 51% bar - a claimant who is 51% or more at fault recovers nothing
- Personal Injury Protection (PIP) and Uninsured/Underinsured Motorist (UM/UIM) coverage must be OFFERED by the insurer but may be REJECTED by the named insured in writing
- Proof of financial responsibility is satisfied chiefly by a liability policy; TexasSure electronically verifies coverage against vehicle registration
- The Texas Personal Auto Policy (PAP) is built from Part A Liability, Part B Medical/PIP, Part C UM/UIM, and Part D Damage to Your Auto (physical damage)
Mandatory Liability and the 30/60/25 Rule
Texas is a financial-responsibility (compulsory liability) state: every owner of a registered motor vehicle must be able to pay for harm they cause to others. The most common way to satisfy the law is a liability auto policy meeting the statutory minimum limits, expressed in the shorthand 30/60/25.
- $30,000 = bodily injury (BI) per person - the most the insurer pays for injuries to any one person.
- $60,000 = bodily injury per accident - the per-occurrence cap across all injured persons.
- $25,000 = property damage (PD) per accident - damage to the other party's car, fence, or building.
These are third-party limits: they protect people the insured injures, not the insured's own car or body. The exam loves to test whether candidates can map each number to its coverage and recognize that 30/60/25 is a split limit, not a single combined number.
Why the split limits matter
A split limit caps each category separately, unlike a combined single limit (CSL) that provides one pooled amount for BI and PD together. Under 30/60/25, an at-fault driver who injures three people in one crash has only $60,000 total for all bodily injury, and no one of them can collect more than $30,000 - even if a single victim's medical bills reach $90,000. The remaining exposure becomes the insured's personal debt.
This gap is exactly why agents counsel clients to buy higher limits and add umbrella coverage. On the exam, watch for a scenario giving large damages against minimum limits: the correct answer is usually that the policy pays only up to the stated cap, and the insured is personally liable for the excess.
| Limit Position | Figure | What It Covers |
|---|---|---|
| Bodily injury per person | $30,000 | Injury to any one individual |
| Bodily injury per accident | $60,000 | All injured persons combined |
| Property damage per accident | $25,000 | Others' property the insured damages |
Memory tip: "30/60/25" - think small, double, smaller-still. The middle number is always the per-person figure doubled.
Proof of Financial Responsibility and TexasSure
Drivers must maintain and show proof of financial responsibility. A liability policy is the usual proof, but the law also recognizes a surety bond, a deposit with the state comptroller, or a certificate of self-insurance for owners of many vehicles. Drivers carry proof as a paper or electronic insurance card and must show it after a crash, on an officer's request, and at vehicle registration or inspection.
TexasSure is the state's electronic verification program. Insurers transmit coverage data that is matched against the vehicle-registration database, flagging vehicles that appear uninsured so the Department of Public Safety and county tax offices can target enforcement. Driving without the required coverage brings escalating fines, surcharges, possible license/registration suspension, and vehicle impoundment for repeat offenders.
At-fault liability: proportionate responsibility
Texas resolves claims under proportionate responsibility, a form of modified comparative negligence with a 51% bar:
- Each party is assigned a percentage of fault.
- A claimant's recovery is reduced by that party's own percentage.
- A claimant who is 51% or more at fault recovers nothing (the bar).
Worked example: Driver A is 30% at fault and has $100,000 in damages; Driver B is 70% at fault. Driver A recovers $70,000 (reduced by A's 30%). Driver B, being 70% at fault, is over the 51% bar and recovers nothing. Note Texas's bar is at 51%, so a party exactly 50% at fault may still recover.
PIP, UM/UIM, and the Texas Personal Auto Policy
Two important coverages in Texas are mandatory to offer but optional to buy, and a written rejection is the key fact tested.
- Personal Injury Protection (PIP) is a no-fault first-party coverage paying the insured's and passengers' medical expenses and a portion of lost income regardless of who caused the crash. Insurers must offer at least $2,500 per person; the named insured may reject it in writing.
- Uninsured/Underinsured Motorist (UM/UIM) pays when the at-fault driver has no insurance (UM) or not enough (UIM). It also covers hit-and-run as uninsured. Insurers must offer UM/UIM up to the policy's liability limits, and it too may be rejected in writing. UM/UIM includes both bodily injury and (with a deductible) property damage.
The key exam pattern: if the question says the insured "declined" PIP or UM/UIM, look for the requirement that the rejection be in writing; an oral decline does not remove the coverage.
Structure of the Texas Personal Auto Policy (PAP)
| Part | Name | What It Provides |
|---|---|---|
| Part A | Liability | Pays others for BI/PD the insured causes (the 30/60/25 coverage) |
| Part B | Medical Payments / PIP | First-party medical (and PIP lost wages) for insured and passengers |
| Part C | Uninsured/Underinsured Motorist | Pays the insured when the other driver is uninsured/underinsured |
| Part D | Damage to Your Auto | Physical damage - collision and "other than collision" (comprehensive) |
Part D is first-party physical-damage coverage with a deductible; collision pays for upset/impact damage, while other-than-collision (comprehensive) pays for fire, theft, glass, hail, and animal strikes. Liability (Part A) and physical damage (Part D) are conceptually separate - a minimum-limits driver may carry liability yet skip Part D, leaving their own car unprotected.
An insured carrying Texas minimum auto limits is at fault in a crash that injures two people: one with $40,000 in bodily-injury damages and one with $15,000. How much will the liability policy pay for bodily injury?
A Texas applicant tells the agent over the phone that he does not want PIP coverage. What is the correct outcome?
In a two-car Texas crash, a jury finds Driver A 55% at fault and Driver B 45% at fault. Driver A has $80,000 in damages. Under Texas proportionate responsibility, what can Driver A recover from Driver B?
Which part of the Texas Personal Auto Policy would respond when the insured's parked car is damaged by hail?