Texas Car Accident Insurance Claims: Your Rights & Legal Guide

All drivers in Texas are required to show proof that they are financially able to pay compensation to anyone who is harmed by the accidents they may cause. This is known as a financial responsibility law. Most drivers comply with this requirement by buying auto liability insurance. Auto liability insurance is the type of insurance that pays to repair or replace the car of another driver and other damaged property.

In addition, auto liability insurance pays the medical expenses of others who may have been injured because of the insured individual’s negligence.

There are 8 basic types of insurance available to drivers in Texas as follows:

• Liability coverage: As noted above, this coverage pays to compensate other drivers and pedestrians who are harmed by a driver. It compensates them for the cost of medical care, property damage, lost wages, and more. The minimum coverage a driver must have in Texas is $30,000 of coverage for personal injury, up to a total of $60,000 per accident, and $25,000 of coverage for property damage.
  • This is referred to as “30/60/25 coverage.” A driver may well want to purchase coverage with higher limits, because if a driver does not have enough liability coverage to pay for the damages and injuries they cause, they might have to pay the rest of the compensation from their own personal funds.
• Collision coverage: This pays to repair or replace a driver’s own car after an accident that the driver’s negligence caused.
• Comprehensive coverage: This coverage pays if a driver’s car is stolen or damaged by fire, flood, vandalism, or something other than a collision.
• Medical payments: This coverage pays for the medical treatment of a driver and their passengers. It also pays if an individual is injured when they are a passenger in someone else’s car or while walking or biking.
• Personal injury protection (PIP) coverage: This is similar to coverage for medical treatment. It pays the cost of medical treatment for the driver and their passengers. It also compensates the driver and their passenger for such items as lost wages and other non-medical costs. All auto policies in Texas include PIP coverage unless the insured tells their insurer in writing that they do not want it.
• Uninsured/underinsured motorist coverage: If a driver is harmed in an accident caused by the negligence of someone who does not have insurance or does not have enough insurance to compensate them completely for their losses, this coverage ensures that the driver gets adequate compensation.
  • It also pays if a driver is in a hit-and-run accident. Insurance companies must offer this coverage to everyone who applies for auto insurance. If a driver does not want it, they must reject it in writing.
• Towing and labor coverage: This covers the cost of paying for a tow if necessary, as well as the labor needed to change a flat tire or jump-start a car if the battery has died.
• Rental reimbursement coverage: If someone’s car is stolen or in the shop being repaired after an accident, this pays for a rental car.

What Are Some Examples of Auto Insurance Conflict?

Insurance companies make profits by collecting more in premiums from their customers than they pay out in claims to those customers. So insurance companies have an incentive to reject claims. They sometimes do this even though the claims are legitimate and the company should pay them.

The refusal of an insurance company to pay in full a claim that they are legally obligated to pay is known as insurance bad faith. In Texas, there are 2 types of insurance bad faith, common law bad faith and statutory bad faith.

Common law bad faith is the law of insurance bad faith that has developed over the years through the opinions of courts in lawsuits that insured individuals have brought against their insurance companies.

To succeed, the insured individual would prove that their insurance company knew or should have known that their claim was valid and should have been paid but was not. Again, the insured individual has to show that their insurance company had good reason to know it should pay the claim but denied it or unreasonably delayed payment.

Texas law also has a statute that specifically identifies many practices that constitute unfair methods of competition or unfair or deceptive acts. These are commonly referred to in Texas as “bad faith conduct.” Some of these practices are as follows:

• Misrepresenting the terms and provisions of an insurance policy
• Making false statements in order to get policyholder to allow a policy to lapse (e.g., to miss premium payments) or surrender the policy
• Making misleading or untrue statements in advertising insurance coverage
• Misrepresenting the important facts in a claim
• Failing to provide a reasonable explanation as to why a claim was denied
• Denying a claim before a reasonable investigation has been done
• Failing to make a decision about a claim within a reasonable period of time
• Failing to offer a reasonable settlement of a claim.

This list is not exhaustive. There are other practices that can be characterized as bad faith insurance practices in Texas. An insured would want to ask a lawyer about the experience they have had and whether it is bad faith.

How Does Car Insurance Work When I Am Not at Fault?

If a driver is harmed in an accident that was not caused by their own negligence, they should inform their own insurance company. Hopefully, they have information about the driver who was at fault, e.g., their name, contact information, the license plate number and state of issue, their driver’s license number and state of issue, and the name of their auto insurance company.

Their insurance company would then be able to contact the other insurance company and submit a claim or they could advise their insured how to submit a claim to the insurance company of the other driver. In any event, the insurance company of the driver who is at fault would provide the compensation to which the driver who is not at fault is entitled.

If it does not, a victim has 2 years in which to file a lawsuit for negligence against the at-fault driver under the Texas statute of limitations for car accidents.

Then, if the driver who is at fault is not insured or does not have enough coverage, the other driver can turn to their own uninsured or underinsured motorist coverage for compensation.

What Happens if the Person at Fault in an Accident Has No Insurance?

Hopefully, a driver who is involved in an accident caused by another driver who has no liability insurance has uninsured/underinsured motorist insurance. This is the type of coverage that provides compensation to an individual who is harmed by the negligence of an uninsured driver.

Again, as noted above, insurance companies, salesmen and brokers must offer this type of insurance to every applicant for auto insurance in Texas. If a driver does not want it, they must reject it in writing. But a driver would be well advised to purchase it as it protects them if they are harmed by an uninsured motorist. Many car accident insurance claims result from uninsured motorists.

What Should I Know About Suing My Auto Insurance Company?

An individual would be well advised to consult a Texas lawyer if they are not getting the service and compensation from their auto insurance company that they believe they should get. The insurance company is sure to have lawyers representing its interests and an insured individual probably needs to have a lawyer represent their interests.

Do I Need a Lawyer for Car Insurance Issues?

If your insurance company has denied a claim that you think is legitimate and should be paid, you want to consult a Texas insurance attorney. LegalMatch can connect you to an experienced attorney who can review your insurance policy and the facts of your situation. They can advise you as to whether you have a claim for insurance bad faith and guide you through the process of getting the compensation you are entitled to by your insurance policy.