Types of Texas Auto Insurance Coverage - Part 2
The following are the basic types of coverage you can expect to encounter as you are shopping for auto insurance in Texas. It is a good idea to familiarize yourself with the terminology and definitions before shopping for a policy, so that you will be able to more accurately compare one policy with the next.
Collision (Damage to Your Car) Coverage.
This type of coverage pays the cost of repairing or replacing your car after an accident, regardless of who was driving or who was at fault. Total payment is limited to your car's "actual cash value," minus your deductible if any. Actual cash value is the market value of your car before it was damaged, also known as "book value." Some companies may require a visual inspection of your car in order to determine this amount.
Comprehensive (Physical Damage Other than Collision) Coverage.
This pays the cost of replacing or repairing your car if it is damaged or lost due to a catastrophe other than collision, such as theft, fire, vandalism, or hail. Comprehensive coverage also pays the cost of a rental car if your car is stolen. In cases of auto theft, you are required to promptly report the theft to police to qualify for reimbursement. Like collision coverage, comprehensive coverage is limited your car's actual cash value minus the deductible, if any.
Towing and Labor Coverage.
This type of coverage pays the cost of towing your vehicle when it cannot be driven for any reason. It also pays the cost of various types of labor, such as changing a tire, at the location where your car broke down.
Rental Reimbursement Coverage.
This type of coverage pays a set daily amount for a rental car if your car is stolen or is being repaired because of damage covered by your policy.
Other Types of Auto Insurance Policies.
Coverage for Stereo Equipment
A standard auto insurance policy will not pay for tapes, CDs, cellphones, CBs, or any stereo equipment not permanently installed in your car. However, you can buy endorsements to your policy that provide separate coverage for these items for an additional premium.
Insurance Coverage When Renting a Car
When renting a car in the state of Texas, one should be aware of the usual practices regarding insurance in these situations. If you have an auto liability policy, then your policy already covers damage to a rental car. If your coverage limit is less than the value of a rental car, however, then you might consider purchasing what is called a "collision damage waiver." A collision damage waiver is an agreement made by an auto rental agency which means they will not hold you responsible for the cost of damage to a car, regardless of who is at fault.
If you rent cars often, it might cost less to raise the liability limit on your auto policy rather than buying collision damage waivers each time you rent. The Texas Automobile Rental Liability Policy provides liability insurance for renters who do not have a personal auto policy.
Auto insurance for non-auto owners.
If you don´t own a car, but borrow or rent cars often, you can buy a non-owner liability policy. A non-owner policy pays for damages and injuries you cause when driving a borrowed or rented car, but not for damage to the auto you are driving.
Continue: Shopping for Auto Insurance in Texas >>
