While you may pay your premiums on time and keep your auto insurance policy active, you may not have the coverage that you need should you have an accident. It is possible that you lack enough coverage to handle your needs, which will leave you in a bad financial situation. The best way to know if you have enough coverage is to make sure you understand your policy.
There is a range of coverage options you can get on an auto insurance policy. The law requires a minimal amount of coverage, which includes bodily injury and property damage. The Insurance Information Institute explains that bodily injury and property damage coverage only pays for damage you do and not damage done to you in an accident. You may have other types of coverage added to your policy.
Coverage for you
If your vehicle suffers damage in an accident, then you will need to have collision coverage on your policy. Collision will cover any damage to your vehicle that occurs as a result of an accident when you are at fault. If you are not at fault but the other person lacks adequate insurance, then your policy may also pay, but generally, you will need to have specific coverage for this type of situation.
In an accident with someone who does not have insurance or who does not have enough coverage to pay for all of your expenses, it can help to have uninsured and underinsured motorists coverage. This type of insurance will pay your expenses in an accident that is not your fault without increasing your insurance premium.
You should note that Texas assigns percentages of fault for an accident. You must pay for damages equal to your percentage, so even if you did not cause an accident, you may have to pay for a portion of your expenses if a court finds you even partially at fault.