WN Insurance Services
What is car insurance?
Owning and driving a vehicle inherently involves the possibility of unexpected accidents and other incidents. It’s nearly inevitable that Texas drivers will be involved in an accident if they drive long enough. Although car insurance can’t take the place of safe driving practices, it does offer essential financial security when things don’t go as planned on the road.
Car insurance shields against financial costs related to accidents and other incidents. Coverage can extend to the vehicle itself, the driver/owner, and every passenger in the car.
What Texas drivers need to purchase auto insurance?
Texas law generally makes auto insurance mandatory. Drivers are usually required to carry at least 30/60/25 coverage, and many drivers choose to purchase much more protection.
In addition to the state’s requirements, many drivers are obligated by a lender’s requirements to purchase additional coverages. Lenders often have drivers who lease or finance purchase comprehensive coverage, collision coverage and gap coverage. These can help protect a lender’s outstanding balance against a vehicle.
Is gap coverage necessary for all drivers?
In situations where a vehicle’s value depreciates faster than a loan is paid off (a common occurrence), gap protection may cover the difference. Without this coverage, drivers who finance their vehicles might be personally liable for the remaining balance if their car is deemed a total loss.
Because lenders can’t trust that all drivers are able to personally cover the difference, gap protection is typically required for drivers who finance or lease their vehicles. Drivers who own their vehicles outright usually do not need this coverage.
Do credit scores affect auto rates in Texas?
Texas broadly allows insurance companies to consider a driver’s credit rating when calculating their premiums, in most cases. Drivers with lower credit ratings are considered riskier than those with higher ratings, potentially resulting in increased premiums for individuals with lower scores.
If your credit rating has improved since your last policy was issued, you may be eligible for a premium reduction.
Insurance agents with expertise in auto policies are well-versed in how credit ratings and other factors impact premiums. An experienced agent can help explore how your particular credit score affects premiums.