• Texas auto insurance pays for damage you cause while driving there.flag image by jimcox40 from Fotolia.com
  
  Texas, like all states, has laws that govern how the auto insurance market functions within its borders. In addition to the state's minimum liability insurance requirements, it strongly encourages drivers to purchase certain additional coverages and levies heavy penalties if you fail to stay legally insured. Texas law holds drivers accountable for all injuries and damages they cause with their vehicles, according to the Texas Department of Insurance.
  
  

Minimum Liability Coverage

• The Texas Department of Insurance states that the minimum liability coverage as of October 2010 for all auto insurance policies issued in the state is $25,000 per injured person with $50,000 maximum for all injured parties in an accident and $25,000 for damage you cause to another person's property. This coverage is represented as 25/50/25. On Jan. 1, 2011, this limit increases to 30/60/25. You can purchase higher liability limits from your insurance agent for additional premiums if you feel that the minimum coverage is not adequate for your needs.
  
  

Uninsured Motorist and Personal Injury Protection

• Texas law does not require you to carry uninsured motorist or personal injury protection on your insurance policy, but your agent must offer them to you. Uninsured motorist coverage pays for injuries you receive from another person whose insurance cannot or will not pay for the damages, or who does not carry insurance at all. Personal injury protection is a no-fault medical coverage that pays for your injuries and funeral expenses plus 80 percent of lost income and the cost of hiring a caregiver if you need one after an accident. You must reject these coverages in writing if you do not want them.
  
  

Penalties

• If you are caught without the mandatory minimum liability coverage, you will face penalties. The Texas Department of Insurance website states that the fine for your first conviction of this type ranges from $175 to $350. Subsequent convictions range from $350 to $1,000 and could include a suspension of your driver's license and impounding of your car. The penalties are even higher if you do not have a valid driver's license when you are caught. According to carinsurancerates.com, Texas legislators want to including vehicle impounding as a first offense conviction to further deter uninsured driving, but have not yet changed the law as of October 2010.