Minimum Auto Liability Coverage Amounts Increased

Effective January 1, 2011

by John Fabry

The minimum coverage amounts for all Texas automobile liability insurance increased on January 1, 2011, from $25,000 to $30,000 for injury to or death of one person in one incident, and from $50,000 to $60,000 for injury to or death of two or more persons in one incident. The minimum coverage amount for destruction of property of others in one incident (property damage liability insurance) remained unchanged at $25,000. Consequently, if you had a 25/50/25 policy, effective January 1, 2011, it became a 30/60/25 policy.

This change is the result of an act passed by the legislature and signed into law by Governor Perry in 2007. The law provides that all policies delivered, issued for delivery, or renewed on or after April 1, 2008, would have the initial limits increase to 25/50/25. The law provides for the second limits increase to 30/60/25 effective January 1, 2011. The law provides no other implementation language for the second limit increase. Consequently, if you have a minimum limits policy when you went to sleep New Year’s Eve, you now have a policy at the new minimum limits of 30/60/25.

Advocates of the change argued that the auto insurance minimum liability coverages had not been adjusted since 1983, when the Motor Vehicle Responsibility Act was passed. Supporters of the law argued that the increase was needed to keep pace with inflation and provide sufficient coverage for medical care or property loss in a collision. The 2011 increase, known as an “escalator clause,” was built into the 2007 law so that the legislature would not need to address the issue again in the near future. Supporters of the 2007 law noted that even with the increase, the minimum liability coverage amounts in Texas would be lower than in most other states.

The Texas Department of Insurance has issued a bulletin to all insurance companies in the state stating that the Department is aware that many insurers issued policies in 2010 with terms continuing into 2011. In that bulletin, the Texas Department of Insurance said it “expects insurers to be able to promptly inform policyholders of the coverage limits as necessary, such as after an accident. For purposes of compliance with Transportation Code Chapter 601, after January 1, 2011, and until the expiration of the policy, the previously issued proof of insurance card remains valid.”

You do not have to do anything to comply with the new law. You have the added protection of the increased minimum limits on your in-force policy as of January 1, 2011, and your current proof of insurance card remains valid. And, at least as important, if you are hit by another driver with a minimum limits policy, there will be a little more money available through insurance to pay for your injuries.

Leave a Reply