Do I Need Collision Coverage? Understanding Your Options in Texas
After a car accident, many drivers wonder whether they need collision coverage. While liability coverage is required by Texas law, collision coverage is optional. However, choosing whether or not to have collision coverage can have a big impact on your finances after an accident. Understanding the difference, how each coverage works, and real-world examples can help you make a smart decision.
1. Liability Coverage vs. Collision Coverage in Texas
In Texas, every driver must carry liability insurance, which includes:
$30,000 for bodily injury per person
$60,000 total for bodily injury per accident
$25,000 for property damage per accident
Liability insurance only pays for damages and injuries to others if you are at fault. It does not pay for damage to your own car, medical bills for yourself, or lost wages.
Collision coverage, on the other hand, pays for damage to your own vehicle caused by a collision with another car or object, regardless of fault.
2. What Happens Without Collision Coverage?
If you do not have collision coverage and you are at fault in an accident:
You are responsible for all repair costs on your vehicle.
If your car is totaled, you receive no compensation.
Even minor accidents could lead to thousands in out-of-pocket costs.
If another driver is at fault:
Their liability policy may cover your car repairs, but only up to their policy limits.
If they are uninsured or underinsured, you could be stuck paying for repairs yourself.
Even if the other driver’s insurance pays, the process can be lengthy and stressful.
Example:
You’re involved in a minor rear-end accident, and it’s determined you are at fault. Your car needs $5,000 in repairs. Without collision coverage, you pay the full $5,000 out of pocket. With collision coverage and a $500 deductible, your insurance covers $4,500.
3. How Collision Coverage Protects You
Collision coverage gives you financial protection and peace of mind, especially if:
You drive a new or valuable car
Your vehicle is financed or leased
You want to avoid out-of-pocket repair costs
Example 2:
Another driver hits your car and their liability policy has a $25,000 limit. If your car needs $30,000 in repairs, collision coverage can pay the $5,000 difference, ensuring your car is fully repaired.
Collision coverage also protects against hit-and-run accidents or cases where the at-fault driver is uninsured, which is not covered under standard liability insurance.
4. Texas Law and Optional Coverage
In Texas, there is no legal requirement to carry collision coverage. Drivers are only required to have liability coverage.
Liability minimums: $30,000 per person/$60,000 per accident for bodily injury, $25,000 for property damage
Collision coverage: Optional, but recommended for most drivers
Without collision coverage, you are essentially self-insuring your vehicle, meaning any damage from an accident could come out of your own pocket.
5. When You Might Skip Collision Coverage
In some situations, collision coverage may not make financial sense:
Older vehicles with low market value: If the repair cost is close to or exceeds the car’s value, paying for collision coverage may cost more than you’d likely receive.
High deductibles: If your deductible is too high, small accidents might not be worth filing a claim.
Financial tolerance: If you can afford to repair or replace your car without insurance, collision coverage may be less necessary.
Even in these cases, consider the risk of an uninsured driver or an accident that exceeds your vehicle’s value.
6. Conclusion
While Texas law only requires liability coverage, collision coverage is highly recommended for most drivers. It ensures your car is repaired or replaced regardless of fault, protects your financial investment, and provides peace of mind. Without collision coverage, you risk paying out-of-pocket for repairs if you are at fault, or being limited by another driver’s liability policy if they cause the accident.
