Did you know that 20% (about 3 MILLION) of Texas drivers have no car insurance at all, per the Texas DOT?
In addition, you can safely estimate that around 50% of Texas drivers (roughly 8.5 million) don’t carry enough insurance to cover the damages caused by even a moderate wreck.
This means that 10 out of every 50 cars that pass you on road don’t have any car insurance whatsoever and 25 out of every 50 vehicles likely do not have adequate insurance should they cause anything more than a minor accident.
On top of this – per Rice University’s Urban Edge data, Texas drivers are tied for the worst in the nation. They cause the highest fatality rate per 100 million miles traveled and have high rates of traffic law violations, careless driving, drunk driving, and speeding.
What does that mean to you as a Texas motorist? The short answer is a potential financial disaster.
First, there is a very real possibility you won’t be able to recover adequate compensation from the at-fault driver or their insurance carrier. Someone else’s negligence could leave you having to cover medical bills, lost wages, property damage, and other costs out of your own pocket (unless you have sufficient Uninsured Motorist (UM) / Underinsured Motorist (UIM) coverage).
The minimum 30/60/25 auto insurance policy limits required by Texas law ($30,000 bodily injury liability per person, up to $60,000 for all persons injured in the accident, and $25,000 for property damage) certainly won’t be sufficient if a multiple day hospital stay is required since simply visiting an emergency room can cost thousands of dollars. And that’s before any diagnostic tests or procedures are even performed!
Additionally, the minimum liability coverages above certainly won’t be enough if more than two vehicles are involved in the accident.
With used car prices at all-time highs and the average cost of a new car approaching $48,000 (per Money.com), $25,000 property damage minimum limits might be insufficient to repair your vehicle or compensate you for a totaled vehicle.
In short, you could be left holding the bag for tens of thousands of dollars (or more) in expenses if the at-fault driver doesn’t carry enough insurance and doesn’t have significant assets to go after (most don’t) to cover the cost of the damages they caused you. Don’t count on other drivers to be financially responsible. Protect yourself now.
How Can You Protect Yourself from Uninsured and Underinsured Drivers?
Fortunately, you can easily protect yourself from uninsured and underinsured motorists for a reasonable cost.
Simply up your liability coverage and UM (Uninsured Motorist) / UIM (Underinsured Motorist) coverage to 250/500/100 ($250,000 bodily injury per person / $500,000 total for all persons / $100,000 for property damage). You should also consider purchasing an umbrella policy.
Reasonable UM / UIM coverage will likely cost you just a few extra dollars per month. It’s affordable and will protect you from being left holding the bag by a negligent uninsured or underinsured motorist. Consider bundling coverages with the same insurance carrier and you should qualify for a nice discount.
What’s the Difference Between Uninsured and Underinsured Motorist Coverage?
UM (Uninsured Motorist) coverage protects you from drivers who don’t have any auto liability coverage at all (even though Texas law requires it). UIM (Underinsured Motorist) coverage protects against at-fault drivers who don’t have enough insurance to cover the damages they caused you.
Remember that – because Texas law requires such low policy limits of 30/60/25 – there’s a good chance that an at-fault driver won’t have enough insurance to cover the damages they caused you.
How Does Uninsured / Underinsured Motorist Coverage Work?
These coverages protect you when an at-fault driver doesn’t have insurance or enough insurance to cover the damages they cause.
An example will help demonstrate the point. Assume that another driver rear-ends you. Typically, you would file a claim with their insurer. However, let’s say they don’t have any insurance. That’s where Uninsured Motorist (UM) coverage would come in. Instead of filing a claim with the at-fault party’s insurer, you would file a claim with your own carrier. Now let’s say that same driver had the Texas state minimum bodily injury coverage of $30,000.00 but you suffered a torn rotator cuff in the collision and your medical bills alone were $40,000.00. Under that scenario you would be able to file an Underinsured Motorist (UIM) claim with your carrier since the at-fault party’s limits are insufficient to compensate you for your incurred medical bills let alone the non-economic damages you are entitled to including pain and suffering, mental anguish, physical impairment, etc.
Technically, Texas law does allow you to go after the personal assets of an at-fault party if they don’t have the necessary car insurance (or enough insurance) to pay for their damages. However, most people that have no automobile insurance coverage (or the state minimum coverage) do not have sufficient personal assets to attempt to recover. In most cases, filing a lawsuit and obtaining a judgment against them simply isn’t a financially viable option.
What if an at-fault motorist collides with your vehicle but flees the accident scene before you can write down their license plate number? This is another scenario where UM coverage comes to the rescue. Just like before, you simply file a claim with your insurance company, and your UM coverage kicks in and takes care of you.
How Much Does UM / UIM Cost?
Fortunately, UM / UIM coverage is quite affordable. For an average driver with a clean driving history, the expense of adding these coverages is negligible compared to the risk of being left holding the bag following a wreck.
What Does UM / UIM Bodily Injury Cover?
Bodily injury coverage takes care of the medical expenses and non-economic damages related to your car accident. UMBI / UIMBI, as they are called, cover these damages up to your chosen policy limits.
Typically, insurance companies state this as 30/60. This simply means the policy’s limits are $30,000 per person and $60,000 per accident. Any amount above that will not be paid for by your insurer.
Understand that “per person” refers to the max coverage for any single person involved in the accident. In this case, that amount would be $30,000 (the minimum required by Texas law).
“Per accident” simply means that will be the total amount paid for bodily injuries for the entire accident. So, if you have other injured family members in your vehicle at the time of your accident, the at-fault driver’s insurance policy will cover up to $60,000 in bodily injuries for the total accident (assuming the other driver has the legally required minimum 30/60 liability insurance required by Texas law).
As noted earlier, 30/60 is way too low to cover the injuries caused in many Texas car accidents. If you need to go to the hospital, or if you get involved in a wreck with more than one other vehicle, it’s easy to exceed the coverage provided by a 30/60 UMBI / UIMBI policy.
That’s why we’re emphasizing that you should carry 250/500. $250,000 per person and $500,000 per accident will provide you adequate coverage in the overwhelming majority of cases. Combine that with an affordable $1 million umbrella insurance policy and you will have protected yourself and your family from other drivers who might not be financially responsible.
What Does UM / UIM Property Damage Cover?
This coverage protects your vehicle when another at-fault driver causes damage to it.
Many drivers, unfortunately, make the mistake of not using this coverage because they already have collision coverage.
However, an uninsured motorist property damage (UMPD) claim holds a couple key advantages over a collision claim:
- Rate increases after a UMPD claim are much lower
- You get protection against a hit-and-run accident
To put this in perspective, take a look at what would happen if you were hit by an uninsured motorist on your way home from work. Assume that your vehicle was completely totaled.
Without UMPD, you’d have to file a collision claim. This type of claim sees you as at-fault for your accident (even though technically that wasn’t the case). Not only will your premiums increase substantially…but they could stay that way for another 3-5 years.
Even though the accident was someone else’s fault!
Now, take the same scenario, but let’s assume you have UMPD coverage instead. The typical UMPD claim raises your rates by just 10% of the amount that a collision claim does. So, that’s a good chunk of cash back in your pocket.
But let’s look at another problem. The Texas state minimum liability coverage for property damage is $25,000. The average cost of a new car runs around $48,000. If the other driver carries just the minimum liability coverage, and they total your car, you would have to come up with the additional $23,000 required for a new car.
And again, this is where UMPD comes in. If you have the recommended $100,000 in UMPD coverage, you’ll be just fine. If you have a car worth more than $100,000, then the recommended umbrella insurance should cover you or you can simply request a higher coverage amount for property damage in the underlying policy.
How Do You File An Uninsured Motorist Claim?
You file an uninsured motorist claim just like you would any other auto insurance claim. Just follow these steps:
- Report the accident to your insurer with as much detail as possible
- Make sure the police file a report. File one yourself if necessary.
- Give your insurance adjuster additional info and images as needed.
- Accept the insurer’s offer if you think it’s fair.
- If you have any doubts about the offer, talk to a car accident lawyer.
Protect Yourself with 250/500/100 UM / UIM and a $1 Million Umbrella Insurance Policy
Just like we said near the beginning of this article and a few times throughout, an easy and affordable way to protect yourself is to add 250/500/100 UM / UIM to your auto insurance policy and then get a $1 million umbrella insurance policy.
This will give you peace of mind in a state with a high rate of auto accidents. Do not rely on other drivers to be financially responsible. Protect yourself and your loved ones by doing something you have control over.
Frequently Asked Questions
Does Texas require UM / UIM coverage?
No. Even though the minimum auto insurance liability limits are set absurdly low, the State does not require UM / UIM coverage.
We strongly recommend adding this coverage to your policy so you don’t find yourself potentially having to come out of pocket tens of thousands of dollars (or more) for something that wasn’t even your fault.
Should you get UM / UIM coverage?
Again, absolutely! It ends up costing you much less than collision coverage. And it protects you from all the other drivers in Texas who either don’t have any auto insurance at all or who don’t have enough to cover the damage they cause.
The more expensive the car you own, the more UM / UIM coverage makes sense. That’s because the minimum property damage we recommend you carry in your UM / UIM policy is $100,000. That should easily cover the cost of most new vehicles.
Additionally, the $250,000 per person / $500,000 per accident of bodily injury coverage will take care of you in the vast majority of cases. We also recommend you consider obtaining a $1 million dollar umbrella insurance policy to cover you in extreme cases where the limits above might not be enough.
So, yes, you should absolutely get UM / UIM coverage. It’s simply a responsible thing to do in a state with a high rate of auto accidents and uninsured / underinsured drivers.
Safer America recently published an article on 2022 accident statistics in the United States. Learn more here.
Shane V. Mullen is an attorney licensed by the State of Texas for the general practice of law, and the Managing Partner at Mullen & Mullen Law Firm in Dallas, TX. His firm focuses exclusively on personal injury law and has been in business for 40 years (since 1983). Before becoming a lawyer, Shane worked for his father as an accident injury claims investigator.