Commercial Auto Insurance Minimum Requirements in Texas
Whether they're business owners or not, all drivers in Texas must prove financial responsibility for any potential accidents they might cause. Financial responsibility is often another way of saying "liability insurance," although there are other ways to comply with the requirement.
Ways to Establish Financial Responsibility
Typically, drivers in this state get a vehicle liability insurance policy. It's not the only alternative, however. The following list covers all your options for adequately proving financial responsibility:
- Get auto liability coverage from an insurance provider licensed to do business in Texas.
- Obtain a surety bond and submit it to your county clerk. The bond requires the signature of two people, who must be property owners in the state.
- Deposit $55,000 in cash or securities to the country comptroller.
- Deposit $55,000 in cash or cashier's check to the county judge.
- Submit a certificate of self-insurance with the Texas Department of Transportation (TxDOT). This option is only available if you own more than 25 cars.
Determine Whether You Need Commercial Insurance
You have a range of factors to weigh before you decide what type of insurance you need. Consider the following:
- How many vehicle(s) you need to insure
- The kind of vehicle(s)
- How the vehicle(s) is being used
- Who drives the vehicle
- Who owns the vehicle
Here's the bottom line: If you own vehicles that are for business use only, it's wise to get a commercial auto policy. If you use your own car for both business and personal activities, or if you have employees who also use their cars for business and personal activities, that's where the line becomes a little blurry.
For instance, if you have a floral delivery business with three cars that your employees drive, you'd probably want a commercial insurance policy to cover the multiple drivers and business-use-only vehicles. But, if you're a private physical therapist and you use your own car to make house calls, a personal liability policy might be sufficient.
Here are some other cases that might require commercial insurance:
- Your business is primarily transporting products or people.
- Your business employs multiple people who drive your business's multiple vehicles.
- Your cars or trucks have equipment for business use only that can't be removed from the vehicle.
- You wish to insure the workers that either use your business vehicles or drive their own cars for business purposes.
- You want liability coverage at a higher amount than a personal policy offers.
Remember, you can contact an insurance agent or TxDOT for assistance determining whether you need commercial insurance.
Determine the Required Amount of Coverage
Once you decide which type of policy you're getting, you'll meet with an insurance agent and discuss the following:
- Who owns the vehicle(s)
- Weight of the vehicle(s)
- Usage of the vehicle(s)
- Liability limits requirements
Purchase a Commercial Policy
There are many insurance providers in Texas, so you have quite a selection to choose from. Some providers specialize solely in commercial auto insurance, and others offer a wide variety of policy types, including the commercial policy you need.
Proof of Insurance and Financial Responsibility
Texas lawmakers have instituted a program with TxDOT―and other state agencies―called TexasSure. This program streamlines the insurance verification process for TxDOT, requiring state insurers to electronically submit weekly reports of new policies, cancellations, and non-renewals.Choose a State:
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