Do Insurance Companies in Texas Have to Offer Uninsured/Underinsured Motorist Coverage?
Texas law requires that all auto insurance policies include state-mandated minimum amounts of Uninsured/Underinsured Motorist (UM/UIM) coverage, which is $30,000 per person for bodily injury, unless the insured rejects this coverage in writing, as mandated under Texas Insurance Code §1952.101. Most insurers allow policyholders to choose higher limits, up to the Bodily Injury Liability Limit for UM/UIM protection or the Property Damage Liability Limit for UM property coverage. If an insurance company cannot provide proof that you rejected UM/UIM or Personal Injury Protection (PIP), you are automatically entitled to the statutory minimums of $30,000 UM/UIM and $2,500 PIP.
Why UM/UIM Coverage Is Important
Texas is unique because, despite mandatory insurance laws, a large number of drivers remain uninsured or underinsured. Many drivers carry only the minimum coverage to save money, leaving victims financially exposed in serious accidents. Even if the at-fault driver has some assets, recovering damages from them personally can be difficult or impossible due to protections like homesteads, retirement accounts, and other exempt property. UM and UIM coverage acts as a financial safety net, ensuring you are protected regardless of the other driver’s insurance status.
Real-Life Examples of UM/UIM Coverage
No Uninsured Motorist Coverage: If an uninsured driver hits you and your medical bills total $50,000, you may have to pay these bills yourself. While you could sue the at-fault driver, Texas law shields many of their assets, making it unlikely you would recover the full amount.
With Uninsured Motorist Coverage: With a $500,000 UM policy, the same accident would allow your attorney to file a claim under your UM coverage, ensuring all medical bills are paid and compensation for pain and suffering is provided—up to your policy limit. UM coverage removes the financial burden and gives you leverage to recover the full value of your injuries.
Underinsured Motorist Without Coverage: If the at-fault driver has $30,000 in insurance but your medical bills are $100,000 and you lack UIM coverage, you are responsible for the remaining $70,000. Texas law protects much of the driver’s personal assets, so even winning a lawsuit may not cover the full loss.
Underinsured Motorist With Coverage: With a $500,000 UIM policy, the remaining $70,000 from the previous example could be claimed under your UIM coverage. This ensures all medical bills are covered and allows compensation for pain, suffering, and lost wages—up to your policy limit. UIM coverage protects you when the other driver’s insurance is insufficient, giving you full recovery leverage.
