Texas car insurance laws: what the statute and TDI require of drivers and insurers

Texas requires every driver to carry at least 30/60/25 liability coverage: $30,000 for one person's injuries, $60,000 per crash for injuries and $25,000 for property damage (Transportation Code 601.072). Personal injury protection and uninsured motorist coverage come with every policy unless a named insured rejects them in writing. On your own claims, the insurer must acknowledge within 15 days, accept or reject within 15 business days of getting everything it asked for, and pay within 5 business days of agreeing to pay.

Those are the headline numbers. The rest of this page sets out the rules behind them, with the statute section or the Texas Department of Insurance (TDI) page each one comes from, so you can quote the rule back to an insurer when a deadline is missed or a cancellation letter arrives.

Estimates and published averages, not a quote. Not insurance advice. State rules and insurer rules vary. Confirm requirements with your state insurance regulator or a licensed agent in your state.

The legal minimum: 30/60/25, and what it does and does not pay

Chapter 601 of the Transportation Code is the Texas Motor Vehicle Safety Responsibility Act. Section 601.072 sets the minimum liability amounts that have applied since January 1, 2011: $30,000 for bodily injury to or death of one person in one collision, $60,000 for bodily injury to or death of two or more people in one collision, and $25,000 for damage to the property of others. TDI's consumer auto guide calls this 30/60/25 coverage. It pays other people when you are legally responsible for a crash. It pays nothing toward your own car and, apart from PIP, nothing toward your own injuries.

Two details in the statute are easy to miss. First, the per-person figure caps what one injured person can collect even inside the $60,000 per-crash total, so a crash that seriously injures one person can exhaust the $30,000 while $30,000 of the per-crash figure goes unused. Second, section 601.072(b) allows a qualifying policy to exclude the first $250 of liability for one person's injuries, the first $500 for two or more people and the first $250 of property damage. Whether your own policy uses that allowance is a question for the policy form, not an assumption.

Driving without the required coverage is a misdemeanor under section 601.191. The fine is not less than $175 or more than $350 for a first offense, and not less than $350 or more than $1,000 after a prior conviction. Section 601.193 gives a defense if you can produce proof of coverage that was valid at the time of the alleged offense, and the court must dismiss once it verifies the document. That is why the proof card in the glove box matters even when the policy itself is active.

For a sense of scale, the NAIC 2024 Auto Insurance Database Average Premium Supplement reports a Texas liability average premium of $893 per insured vehicle and a combined average premium (liability plus collision plus comprehensive) of $1,917 per insured vehicle for 2024. Those are published averages for a past year, not a quote, and they are on the Texas rate index page with the national comparison. Whether 30/60/25 is enough for your household is a separate question, worked through in how much car insurance you need and in the state minimum liability limits guide.

PIP and uninsured motorist coverage: on the policy unless you reject them in writing

Texas is not a no-fault state, but it does make two first-party coverages part of every auto liability policy by default. Insurance Code section 1952.152 says an insurer may not issue an auto liability policy in Texas, including one written through the Texas Automobile Insurance Plan Association, unless it provides personal injury protection. Section 1952.101 says the same for uninsured and underinsured motorist coverage. Each section then adds the exit: the coverage does not apply if any named insured rejects it in writing. Outside these first-party coverages, a claim against the other driver follows Texas’s proportionate responsibility rule, under which a claimant more than 50 percent responsible recovers nothing (Civil Practice and Remedies Code 33.001); the shared-fault comparison of state negligence rules sets Texas beside the other states.

The PIP floor is low. Section 1952.153 says the chapter does not require an insurer to provide PIP above $2,500 for all benefits per person, so $2,500 is the amount the statute makes standard, and higher limits are an option you buy. PIP benefits are payable without regard to fault (section 1952.155), and section 1952.156 requires the insurer to pay them as claims arise, but not later than the 30th day after it receives satisfactory proof of the claim.

A written rejection is sticky. Both sections say that once a named insured has rejected the coverage, the insurer does not have to put it back on a renewal or reinstated policy, or on a later policy from the same or an affiliated insurer, unless the named insured asks for it in writing. A rejection signed years ago at a dealership or during an online purchase can still be governing your current declarations page. If you want the coverage, the fix is a written request, and the declarations page is where you confirm it took effect.

What uninsured motorist coverage does in practice, and how to size it against your liability limits, is in the uninsured and underinsured motorist guide. The Texas-specific point is procedural: no rejection form, no rejection.

Texas rules at a glance

The table collects the rules on this page in one place, each with the section or page it comes from. Statute sections are from the Texas Legislature's published code text. TDI references are to its consumer auto insurance guide, last updated December 11, 2025. Both were read on October 22, 2026.

Claim deadlines: the prompt payment clock on your own claims

Subchapter B of Chapter 542 of the Insurance Code is the Texas prompt payment of claims law. It applies to a first-party claim: one you make under your own policy that the insurer pays to you (section 542.051). Collision, comprehensive, PIP and uninsured motorist claims on your own policy are first-party claims. A claim against the other driver's liability insurer is not, and TDI's guide says plainly that the prompt payment law does not apply when another driver's insurer is paying.

The clock has three stages. Within 15 days after the insurer receives notice of the claim, section 542.055 requires it to acknowledge the claim, begin any investigation, and ask for all the items, statements and forms it reasonably believes it will need. It may ask for more later if the investigation turns something up. If it acknowledges by phone rather than in writing, it must record the date, manner and content of that acknowledgment.

Once it has everything it asked for to secure final proof of loss, section 542.056 gives it 15 business days to tell you in writing whether it accepts or rejects the claim, or 30 days if it has a reasonable basis to believe the loss came from arson. A rejection must state the reasons. If it cannot decide in time, it must tell you within the same 15 business days why it needs more time, and it must then decide no later than the 45th day after that notice. If it accepts all or part of the claim, section 542.057 requires payment within 5 business days of that notice, or within 5 business days after you perform an act the payment depends on, such as signing a release.

The consequence is in sections 542.058 and 542.060. If the insurer, after receiving everything it reasonably requested, delays payment beyond the period another statute sets or, where none does, beyond 60 days, it owes interest on the claim amount at 18 percent a year as damages, together with reasonable attorney fees, unless arbitration or litigation finds the claim invalid. Section 542.059(b) extends the claim-handling deadlines by 15 days after a weather-related catastrophe or major natural disaster, as the commissioner defines it, which matters after hailstorms and floods.

A worked timeline with stated dates

Labelled illustration only, with assumed dates. A driver reports a comprehensive claim for hail damage, and the insurer receives notice on Tuesday, February 3, 2026. No catastrophe extension applies. The insurer asks for photos and a repair estimate, and the last requested item reaches it on Monday, March 2, 2026.

1. Acknowledgment due: by Wednesday, February 18, 2026, the 15th day after notice (542.055). Calendar days, not business days.
2. Decision due: counting 15 business days after March 2 and skipping weekends gives Monday, March 23, 2026 (542.056). If a state holiday fell inside that window, the date would move one business day later for each.
3. If the insurer needs more time: it must say why by March 23, then decide within 45 days of that notice. A notice sent on March 23 sets the latest decision date at Thursday, May 7, 2026.
4. If it accepts on March 23: payment is due within 5 business days, which is Monday, March 30, 2026 (542.057).
5. If payment is still outstanding more than 60 days after March 2: the 18% annual interest and attorney fee provisions of 542.060 come into play, unless the claim is later found invalid.

Two practical points follow. Write down the date the insurer received your last document, because every later deadline counts from it, and send documents in a way that shows receipt. And if a decision letter rejects the claim, check that it states reasons, as section 542.056(c) requires. The general sequence of a claim, from the scene to the settlement, is in how to file a car insurance claim.

Repairs, total losses and salvage titles

TDI's guide states the valuation rule Texas policies use: repair payments are capped at the car's actual cash value, which it describes as the cost to replace your car minus depreciation, and a total loss pays the car's value minus depreciation, not the price of a new car of the same make and model. If you keep a totaled car, the insurer subtracts its salvage value from the settlement.

The title consequences come from the Transportation Code. Section 501.091 defines a salvage motor vehicle as one whose cost of repairs, including parts and labor but excluding repainting materials and labor and sales tax, exceeds its actual cash value immediately before the damage. A nonrepairable motor vehicle is one damaged to the point that its only residual value is as parts or scrap. TDI's guide adds that a car with a nonrepairable title cannot be retitled or registered. A car that is repaired from a salvage title can be put back on the road through the rebuilt process, but it carries the history with it, and its value at the next sale reflects that.

Two rules protect you during repairs. TDI says an insurer may suggest preferred shops but cannot require you to use a shop on its list. It also says replacement parts must be of like kind and quality, which is not the same thing as original manufacturer parts. If OEM parts matter to you, that is a policy-form and endorsement question to ask before a claim. The full arithmetic of a total-loss offer is in how a total loss payout is calculated.

When you disagree: appraisal, complaint, court

Texas consumers have three formal routes, and they fit different disputes. Appraisal fits an argument about the amount of a covered loss on your own policy. TDI describes it this way: you and the insurer each hire an appraiser, the two appraisers pick an umpire, and the umpire's decision is binding. You pay your appraiser and half of the umpire's cost. TDI notes appraisal applies only to disputes with your own insurer, not the other driver's.

A complaint to TDI fits a handling problem: a missed deadline, an unexplained rejection, a refusal to give reasons. TDI says complaints must be in writing and points consumers to its online complaint portal. A complaint does not decide the value of your claim, but it puts the insurer's handling in front of the regulator.

Court fits a claim the other side will not pay. TDI notes that Justice Court handles claims under $20,000, does not require an attorney, and charges filing fees upfront. For larger or injury claims, an attorney licensed in Texas is the person to ask, and nothing on this page is a substitute for that advice. For a flat denial, with the California and New York routes beside the Texas one, see what to do when a claim is denied.

Cancellation and nonrenewal: what notice Texas requires

Texas separates cancellation, which ends a policy during its term, from nonrenewal, which declines to continue it at the end. Insurance Code section 551.104 lists when a personal auto policy can be cancelled. In the first 60 days, the insurer may cancel for any reason, and TDI adds the limit that the cancellation cannot itself violate a law. After that, the grounds narrow to nonpayment of premium, a fraudulent claim, a TDI determination that continuing the policy would violate the law, or the suspension or revocation of the driver's license or registration of the named insured or of a driver who lives in the household or customarily drives a covered car.

That last ground has a built-in alternative. Section 551.104(d) says the insurer may not cancel on that basis if the named insured agrees to an endorsement that removes coverage for the person whose license was suspended or revoked. Cancellation on these grounds takes effect no earlier than the 10th day after the insurer mails the notice. Separately, section 551.104(f) allows cancellation on a 12-month anniversary of the original effective date with at least 60 days' written notice.

Nonrenewal works on a longer notice. Section 551.105 requires the insurer to renew at your request unless it mailed written notice of nonrenewal at least 60 days before the policy expires. TDI's guide explains the date split: 60 days applies to policies bought or renewed in 2024 and later, and 30 days applied to policies bought or renewed in 2023 or earlier. TDI also says a policy can be nonrenewed only after it has been in effect for 12 months, and section 551.106 bars refusing to renew solely because of the age of a covered person.

TDI lists claims that cannot by themselves be grounds for nonrenewal: damage from weather and collisions with animals, and incidents in which you were not at fault, unless there was more than one such incident in 12 months. It adds two narrower rules: after three claims for damage from flying objects in 36 months, the insurer may raise your deductible, and after four towing and labor claims in 36 months it may decline to renew that coverage. Section 551.109 requires the insurer to give a written statement of the reason for a declination, cancellation or nonrenewal; the section was most recently amended effective January 1, 2026.

If a policy is cancelled, TDI says the unearned premium must be refunded within 15 days. Section 551.106(c) also allows an insurer to reinstate a policy cancelled for nonpayment if the premium is paid within 60 days, but coverage lapses on the cancellation date and is not effective again until payment is received. That gap is a real lapse, with the consequences described in what a lapse in car insurance sets in motion. How Texas notice periods compare with other states is in cancellation vs non-renewal.

Household drivers, teens and a newly bought car

TDI's guide sets reporting expectations that are easy to forget. Tell your insurer when someone in your household starts to drive or turns 16. If you do not, and the company finds out, it can bill you for the premium it should have charged, deny claims, or decline to renew. If a teen is the main driver of one of the cars, the premium is based on that car; otherwise it is based on the family car with the highest rate. The full sequence, from learner license to the teen's own car, is in adding a teen driver to your policy. Whose policy answers when you lend the car to someone outside the household is in lending your car: whose insurance pays.

A newly bought car is covered automatically for a short window. TDI says current coverage applies to a new car for about 20 days, and that you should notify the company promptly to avoid a lapse. Read that as a grace period for paperwork, not as a reason to wait, and check that the coverages you carry on the existing car are the ones you want on the new one.

TDI also notes that most personal policies do not cover accidents while you drive for a ride-hailing service or deliver items for a fee. That exclusion has its own statute in Texas, covered below.

Credit information in Texas rating

Texas allows credit-based insurance scoring with conditions written into Chapter 559 of the Insurance Code. Section 559.052 bars an insurer from denying, cancelling or nonrenewing a personal policy solely on credit information without considering another underwriting factor, and from using a score computed with factors that are unfair discrimination. TDI's guide puts it simply: insurers may use credit in pricing, but they may not deny coverage or charge more based only on your credit score.

If credit information contributes to an adverse action, section 559.054 requires the insurer to tell you within 30 days, with up to four primary factors, the consumer reporting agency's contact details, a statement that the agency did not make the decision, and notice of your right to a free copy of your report within 60 days and to dispute it. A generic phrase such as poor credit history is not enough. If a dispute shows the information was wrong, section 559.055 requires re-underwriting and re-rating within 30 days of the insurer receiving notice. Section 559.058 requires the insurer to update an insured's credit report at least every 36 months and, on request at renewal, to re-rate on a current report no more than once every 12 months. How these scores work nationally, and where other states restrict them, is in credit-based insurance scores.

If insurers decline you: TAIPA

The Texas Automobile Insurance Plan Association is the state's residual market for drivers who cannot find coverage voluntarily. TDI says you can get TAIPA coverage after two insurers have declined you. It adds two exit signals: after one year without tickets or accidents your rate may drop, and after three years the insurer must offer you a cheaper policy outside TAIPA. Note that Chapter 551's cancellation and nonrenewal protections are written for personal auto policies other than those written through TAIPA (section 551.102), so a TAIPA policy's terms are worth reading on their own.

Rideshare drivers: Chapter 1954

Texas wrote transportation network company insurance into Chapter 1954 of the Insurance Code, effective January 1, 2016. While a driver is logged on and available but not on a ride, the coverage must provide at least $50,000 per person and $100,000 per incident for bodily injury and $25,000 for property damage (section 1954.052). From the moment a driver accepts a ride until the last rider leaves the car, it must provide at least $1 million combined per incident (section 1954.053). Section 1954.151 allows a personal auto policy to exclude every coverage, including collision and comprehensive, while the driver is logged on or on a ride. The period-by-period reading is in rideshare insurance explained.

Your claims history report

Insurers in Texas, as elsewhere, read claims history reports when they quote and renew. TDI's guide says you can get one free copy of your CLUE report each year by calling LexisNexis at 866-312-8076. Federal law, not Texas law, governs your right to dispute what is on it. The request and dispute steps are in your CLUE report and MVR.

Where these rules stop

These are rules about conduct and deadlines. None of them sets your premium. Texas rates are filed under Chapter 2251 of the Insurance Code, and section 2251.101 lets an insurer use a filed rate from the date it is filed, with the commissioner able to disapprove it within 30 days (section 2251.103). So a Texas renewal can rise without anyone approving it in advance, which is the reason to read your increase line by line, as in why your renewal went up, and to know how to look up the filing, as in reading your state's rate filing.

The rules also have edges. The prompt payment deadlines cover your own claims, not claims against another driver's insurer. Surplus lines insurers run on longer deadlines in the same sections. Policies written through TAIPA are outside the Chapter 551 cancellation subchapter. And statutes change: section 551.109 was amended effective January 1, 2026, and section 1954.003, applying the rideshare chapter to automated vehicles, took effect September 1, 2025. Check the current text, and ask TDI or a licensed Texas agent when a rule decides something that matters. Two other states’ rules are read in the same way on Florida car insurance rules and Michigan no-fault PIP choices.

Questions readers ask

Rules set the floor; the Texas rate index shows what Texas drivers actually paid on average in 2024, and how that compares with the national figure.