Shopping for auto insurance: What to know before you buy a policy (2024)

1. You’re responsible for accidents you cause.

   State law requires people who drive in Texas to pay for accidents they cause. Most people do this with liability insurance. A liability policy pays to repair or replace the other driver's car and pays other people's medical expenses if you’re at fault in an accident.

   See Also

   Insurance Mistakes to Avoid | Insurance - Consumer Reports

   In Texas, you must have at least $30,000 in liability coverage for each injured person, up to a total of $60,000 per accident, and $25,000 for property damage per accident. This basic coverage is called 30/60/25.

2. Decide how much liability coverage you need.

   Because of car prices and the high cost of medical care, the minimum amounts might not be enough to pay all of the costs if you're at fault in an accident. Other drivers could sue you to collect the difference. Consider buying more than the minimum limits to protect yourself.

3. Decide what kinds of other coverage you need.

   Liability insurance doesn't pay to repair or replace your car or to treat your injuries. Other types of coverage to consider include:

   • Collision – pays for damage to your car.
   • Comprehensive – pays for damage from fire, hail, vandalism, or theft.
   • Uninsured or underinsured motorist – pays for auto damage, medical treatment, lost wages, pain and suffering, and other expenses if the driver who caused the accident didn’t have enough insurance or didn’t stop.
   • Medical payments – pays medical bills resulting from an accident.
   • Personal injury protection – pays for medical bills, plus 80 percent of lost income and the cost of a caregiver for an injured person.

4. Get price quotes from several companies.

   • Use TDI’s HelpInsure to get sample prices and compare policies. It also provides information about a company’s complaint record, financial rating, and recent rate changes to help you find a good company and a good price.
   • Once you’ve narrowed your search, contact your top choices to get price quotes. Use our worksheet to compare companies and policies.

5. Look at a company's complaint record.

   A good way to check a company’s customer service is to look at its complaint record, which is measured by a complaint index. A value of 1 is average. Less than 1 means it gets fewer complaints than the average insurance company, and a number higher than 1 means the company gets more complaints than average.

6. Decide on a deductible.

   A deductible is the amount you have to pay before the insurance company will pay. For example, if you have a claim for $1,200 and a deductible of $500, the insurance company will deduct $500 and pay you $700. The higher your deductibles, the lower your premium.

7. Ask about discounts.

   Most companies offer discounts if you reduce the chances of a loss. Common discounts include taking defensive driving or driver’s education courses, maintaining a good driving record, having more than one car on a policy, and having other policies with the same company.

8. Verify the company's license.

   Once you decide on a company, check to make sure its license is up to date. You can get this information by calling our Help Line at 800-252-3439.

9. Avoid gaps in coverage.

   Never cancel a policy until you get your new policy or a written statement that proves you have coverage. Keep shopping if a company turns you down. If you have trouble finding insurance, ask an insurance agent about getting coverage through the Texas Automobile Insurance Plan Association.

10. Know where to get help.

    We have staff ready to answer your questions from 8 a.m. to 5 p.m. Central time, Monday through Friday. Call us at 800-252-3439. We also have publications on a range of insurance issues.

Resources

• Auto insurance shopping guide
• How you drive could save you money on car insurance
• Do you need gap insurance for your car? How does it work?
• Lower your car insurance rates: Tips for saving money
• What are the different types of car insurance coverages? (video)
• How to compare car insurance rates (video)
• What kind of auto insurance do you need? (video)