Drivers in Texas must be able to prove financial responsibility for any accidents they cause. According to the state department of insurance, up to 20% of Texas drivers on the road at any time are uninsured. In an effort to decrease that number, state lawmakers have made it mandatory to carry a minimum amount of liability insurance.

Ways to Establish Financial Responsibility

Most drivers in the state prove their financial responsibility quickly and easily by purchasing an auto liability policy. It's not your only option, however. The following is a list of all the ways you can officially establish financial responsibility with the state:

• Get vehicle liability coverage through a state-licensed insurance provider.

• File a surety bond with your county clerk. The bond must include two people, both of whom own real property in Texas.

• Make a deposit of $55,000 in cash or securities to the county comptroller.

• Make a deposit of $55,000 in cash or cashier's check to the county judge.

• Certify with the Texas Department of Transportation (TxDOT) that you are self-insured. This option is only available if you own more than 25 cars, so it's typically used by dealers.

Texas Liability Insurance Requirements for Private Passenger Vehicles

The minimum state requirements for liability coverage are 25/50/25. That means you are covered for the following amounts:

• $25,000 bodily injury coverage for one person in a single accident

• $50,000 bodily injury coverage total per accident

• $25,000 property damage coverage per accident

Be sure to keep your insurance card in your vehicle at all times. If asked, you should be prepared to show it to law enforcement. You'll also need it to register your car or apply for a driver's license―and, of course, if you're ever in an accident.

The coverage amounts listed above are only minimums; there is no maximum. Depending on your financial situation and the condition of your car, it is often smart to increase coverage amounts or purchase additional insurance to protect you and your passengers. Educate yourself about the various types of insurance coverage to make sure you get the policy that will work best for you.

Proof of Insurance and Financial Responsibility

To make insurance tracking easier, Texas lawmakers teamed up with TxDOT―and several other state agencies―to create TexasSure, a program to verify insurance electronically.

TexasSure: Insurance Verification Program

This verification program requires state insurance agencies to electronically submit insurance information directly to TxDOT. Once in the system, the information is accessible by all TxDOT departments, as well as law enforcement.

As long as you maintain the required minimum of coverage on your vehicle, no further action on your part is required. You'll only hear from TxDOT if your insurance lapses or is canceled for some reason, or if there's a discrepancy in your records.

If you get a notice from TxDOT about your insurance, you'll need to respond by sending proof that you do have the required insurance, or resolve the discrepancy.

Penalties for Failure to Maintain Financial Responsibility

Having no proof of insurance doesn't just make for awkward moments between you and law enforcement. Whether you don't respond to a notice from TxDOT, or you really don't have insurance for any reason, the result is suspension of your driver's license and registration.

Upon suspension of your privileges, you have 20 days to decide whether to appeal or not. If you do appeal, you'll need to contact TxDOT at the address or phone number on your suspension notice. An appeal can stop suspension procedures until the matter is resolved.

A second suspension for lack of insurance will probably end up with your car being impounded for 180 days. Plus, the state will charge you a $15 fee for each day your vehicle is in impoundment.

Reinstating Registration and Driver's License

You can lift your suspension by doing the following:

• Provide proof of current liability coverage.

• Pay reinstatement fees from $175 to $350.