Insurance Coverage

The only type of automobile insurance mandated by the State of Texas is liability insurance. The minimum amount of liability insurance is typically referred to as 25/50/25, which means that the insurance company will not pay any more than $25,000 per person, and no more $50,000 per accident. The 25 refers to property damage, which means that the insurance company will pay no more than $25,000 to cover property damage.

However, 25/50/25 is only the minimum amount of liability insurance required. A policy holder may contract for coverage in excess of the minimum limits. For instance, insurance policies in Texas usually range in one of these increments: 25/50/25, 50/1000/50, 100/300/100, or 250/500/100. In addition to having large limits of liability insurance, some policyholders may also contract for additional insurance, called umbrella coverage.

To better explain the policy, lets assume that Larry and Moe are severely injured in a car accident with a liable party that has 25/50/25 in liability insurance. This means that the liability insurance company will not pay any more than $50,000 for the entire accident. Moreover, neither Larry nor Moe will be entitled to any more than $25,000 per person. For instance, even if Larry and Moe both have $25,000 in medical bills, Larry and Moe will only recover from the liability insurance company $25,000 each.

Essentially, no matter how many people are involved in the auto accident, and no matter how serious the injuries, the liability insurance company will not pay any more than the applicable liability insurance policy limits. Therefore, when you have three or more claimants with serious injuries and only limited insurance proceeds, it can become a race to the money.

Even though liability insurance may be exhausted as described above, additional money may still exist in the form of underinsured motorist coverage. Of course, whether a claimant is entitled to underinsured motorist benefits depends upon the particular circumstances of the case and the type of personal auto insurance carried by the driver and/or the passenger(s).

Click the links herein for detailed information on how to obtain underinsured motorist benefits, and uninsured motorist benefits.

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