A Primer on Texas Auto Insurance
Insurance can be a confusing concept. Since virtually all automobile-related crashes involve some form of insurance, it is important to have a basic understanding of what insurance is and how it works.
Insurance: A Primer
Insurance is the shifting of risk from one party to another. For a given fee, the insurance company agrees to assume particular risks and pay out certain financial losses up to the policy limit.
First-Party Insurance v. Third-Party Insurance
First-party insurance is designed to cover the policyholder against losses suffered by the policyholder and/or his or her property. Examples of first-party insurance include uninsured or underinsured motor coverage (“UM/UIM”) and personal injury protection (“PIP”).
Unlike first-party insurance, which is designed to benefit the person who purchases the coverage, third-party insurance protects the policyholder against losses that arise when he or she causes harm to a third party. An example of third-party insurance is automobile-liability insurance.
Liability Insurance
Liability insurance is third-party insurance that protects the policyholder when he or she causes a collision that results in property damage or bodily injuries to a third party. In Texas, all drivers are required to maintain at least $30,000.00 of coverage for personal injuries per claimant (up to a total of $60,000.00 per collision) and at least $25,000.00 of coverage for property damage. This is referred to as “30/60/25 coverage.”
Uninsured/Underinsured Motorist Coverage
Because the damages in a car crash can exceed the minimum liability limits (and because many people drive without any form of insurance), some drivers choose to purchase UM/UIM coverage. UM/UIM coverage is first-party insurance that protects the policyholder in the event he or she is injured by a driver who either is uninsured or who does not have enough liability insurance to cover the policyholder’s injuries. UM/UIM coverage can be purchased in an amount that is less than or equal to the policyholder’s liability limits.
Personal Injury Protection and Medical Payments Coverage
PIP is first-party insurance that provides payment for reasonable expenses—including medical expenses and lost wages—that arise from a car crash. It provides “no-fault” coverage, which means the policyholder is entitled to receive the benefits regardless of his or her fault in causing the collision.
Medical payments coverage (“Med-pay”) is similar to PIP except that any benefits received under a Med-pay policy must be paid back to the insurance company if the policyholder recovers money from a third party (e.g., through a settlement or a verdict).
Hire an Experienced Injury Lawyer After a Car Crash
As you might imagine, there are many different kinds of policies that offer many different kinds of coverage. Chances are high that the adjuster assigned to a claim has more experience than the victim does (and chances are higher that the adjuster will use that experience against that victim).
If you or a loved one has been injured in a car crash, you have enough things to worry about. Do not let negotiating with an insurance company and navigating through a confusing auto-insurance policy be one of them. We deal with the insurance company so you can focus on getting your life back to normal. You have one chance to do this; make the right choice by choosing the right attorney. Call us at (956) 291-7870 or email us at contact@rdjlawyer.com for a free consultation and case evaluation.