What Does It Mean When the Texas State Inspection Checks for Evidence of Financial Responsibility?

Proof of financial responsibility is the law in Texas. It usually translates to liability insurance, although it really means the ability to pay for any damage you may cause. Many states use this language in various statutes to allow flexibility, such as a cash bond or surety bond in place of insurance. Texas requires proof of financial responsibility in several statutes, including the Water Code, but the most common use in Texas relates to automobile insurance.

Texas Requires Automobile Liability Insurance

Texas has one of the highest percentages of uninsured vehicles in the United States, although Texas laws require proof of financial responsibility. This is usually automobile liability insurance coverage for vehicles registered in the state or driven on the state highways. If you cause injury or property damage, the damaged person has a method of recovery from the insurer for the injuries or damage. States that have financial responsibility laws may require proof of insurance or a cash or surety bond filed with the appropriate state office.

Liability insurance does not cover your car or your injuries. It is intended to cover the other driver and vehicle, and is the only insurance many drivers have. If you want to cover your automobile and yourself, you need comprehensive and collision insurance.

Requirements for Financial Responsibility in Texas

Texas requires proof, and if a peace officer stops you, you need to have your insurance policy, a binder or your insurance card available. Alternatively, you need proof that you have filed a surety bond or a deposit with the comptroller or a county judge or have a self-insurance policy. The Texas Transportation Code Section 601.051 covers financial responsibility and establishes specific regulations for the insured and the insurer.

Limits for Financial Responsibility in Texas

Insurance language is complex, but the basics are easy. Texas minimum requirement is 30/60/25 in liability insurance coverage. This insurance policy is for $30,000 coverage for an injury to one person, $60,000 coverage for an accident and $25,000 for property damage to a vehicle. The Transportation Code provides for a $250 deductible allowance for one injury or property damage, with a $500 deductible for two or more.

TexasSure Verifies Your Insurance Coverage

TexasSure is a software program that verifies your insurance. Texas updates this database weekly with information from insurance companies. If you have recently acquired insurance or recently failed to pay a premium, TexasSure has the information. This allows peace officers to check for instant information and helps thwart fraudulent practices. If you have an accident and have no liability insurance coverage, Texas may charge a fine or suspend your driver's license, along with your vehicle registration. If the owner or operator is from another state, nonresident operating privileges are suspended.

References

• Texas Statutes: Transportation Code: Chapter 601 - Motor Vehicle Safety Responsibility Act
• FindLaw: Tex Tn. Code Ann. § 601.072 : Texas Statutes - Section 601.072: Minimum Coverage Amounts; Exclusions
• Texas Department of Insurance: TexasSure Vehicle Insurance Verification
• The Dallas Morning News: TexasSure Program Finds About 25 Percent of Vehicles Uninsured in Dallas County
• Texas Department of Insurance: State Announces Program to Crack Down on Uninsured Drivers

Resources

• Texas Department of Insurance: Texas Financial Responsibility Law