Auto Insurance Policy Limits

Drivers in Weatherford, Aledo, Azle, Parker County, Millsap, Godley, Hudson Oaks, Mineral Wells, Pool, Brock, and all other parts of Texas probably do not realize that the minimum policy limits for liability insurance on all automobiles went up on January 1, 2011.
Lawyers, and in particular, lawyers who do a lot of personal injury types of cases have wondered how this new law was going to work. The law originally changed regarding minimum limits on April 1, 2008. At that time the minimum, which had been $20,000 for personal injuries was raised to $25,000.
This law is found in the Texas Transportation Code, Section 601.072. When it was enacted, it was interpreted to mean that any new policy that went into effect after April 1, 2008, would have the new minimum limit of $25,000. What this means is that any policy that was written before April 1, 2008 still insured for the lower limit of $20,000. So, a policy issued in March of 2008, that was to provide coverage through September 2008, would still have a minimum of only $20,000 because the policy had been issued prior to the change going into effect on April 1, 2008. However, all policies written after the April 1, date would carry the $25,000 minimum.
The new minimum that went into effect on January 1, 2011, raises the minimum limit from $25,000 to $30,000. The difference between this change and the change that took effect on April 1, 2008, is that this most recent change effects all policies immediately. So, even a policy that was issued before January 1, 2011, now automatically covers the new minimum of $30,000. It applies to not just the new policies issued but also the older policies that are still in effect.
Any doubt about the interpretation of this new law appears to be resolved by a communicaton by the Texas Department of Insurance. This communication was issued on November 15, 2010. This is “Commissioner’s Bulletin #B-0048-10“.
This communication / bulletin was issued, “TO: ALL INSURANCE COMPANIES, CORPORATIONS, EXCHANGES, MUTUALS, COUNTY MUTUALS, RECIPROCALS, ASSOCIATIONS, LLOYDS OR OTHER INSURERS WRITING AUTOMOBILE INSURANCE IN THE STATE OF TEXAS RE: MOTOR VEHICLE SAFETY RESPONSIBILITY ACT: INCREASE IN MINIMUM FINANCIAL RESPONSIBILITY LIMITS FOR COMMERCIAL AND PERSONAL AUTOMOBILE INJURY LIABILITY COVERGE”
This communication informed all insurance companies that the new automobile liability insurance would change from $25,000 to $30,000 for bodily injury or death of one person in one accident and from $50,000 to $60,000 for bodily injury to or death of two or more persons in one accident. One part of the liability coverage that did not change was the minimum liability coverage on property damage. This element of liability coverage remained at $25,000.
Along these lines the minimums for underinsured and uninsured coverage would also have increased on January 1, 2011, to reflect the new limits.
The law telling us this is found in the Texas Insurance Code, Section 1952.105. This section says that the minimum limits that are applicable are those in Chapter 601 of the Transportation Code.
Some insurance companies are not telling new claimants of these changes when claims are made. Even some personal injury attorneys are not aware of these changes and thus are negotiating and handling the people they represent as if the old limits are still in effect.
Knowing about these changes may not make a difference in every case but it certainly makes a difference in any case that has a potential worth in excess of $25,000.
To be on the safe side, it is wise to consult with an experienced Insurance Law Attorney.
Regardless of when the policy was issued, an accident that happened prior to January 1, 2011, would still be under the old limits of liability. Any accident or loss occurring after that date would have the new limits.