7 Common Policy Gaps Could Cost Texas Drivers Thousands This Fall

Source: Shutterstock / Tero Vesalainen

Fall in Texas is more than just cooler evenings and football tailgates; it’s also about the more than 25 million licensed drivers who are heading to school, work, or errands — or venturing out for road trips. Unpredictable weather, weekend getaways to Hill Country, college football games, and heavier holiday traffic all increase the risk of accidents on Texas roads. Unfortunately, however, many drivers only discover gaps in their auto insurance policies after an accident. So if you’re getting on the road this fall, be sure you know which common policy gaps might affect you and your finances.

1. Liability Limits Too Low

Texas law requires drivers to carry at least 30/60/25 liability coverage. That’s $30,000 per person for bodily injury, $60,000 per accident, and $25,000 for property damage. While these limits satisfy legal requirements, they rarely cover the full cost of a serious accident.

Consider that the average cost of a new car now exceeds $48,000, according to Kelley Blue Book, if you total someone’s SUV, $25,000 in property damage coverage may only pay half the bill. The remaining balance could come out of your pocket. Similarly, hospital stays and emergency care can push medical costs far beyond $30,000. Raising your liability limits is often one of the most affordable ways to protect yourself against lawsuits or debt.

2. Uninsured/Underinsured Motorist Coverage

Texas consistently ranks near the top of states with uninsured drivers, and the Texas Department of Motor Vehiclesestimates 20% of drivers are on the road without insurance. Among the insured, even more carry only the bare minimum liability limits.

If one of these drivers causes an accident, your own uninsured/underinsured motorist (UM/UIM) coverage is what steps in. Without it, you may have to pay for your own medical expenses, lost wages, and vehicle repairs. Many drivers skip UM/UIM to save money, but in Texas, that gamble can backfire.

3. Excluded or Unlisted Drivers

Texas car insurance policies may include named-driver exclusions, which specifically list individuals — sometimes even family members or household residents — who are not covered if they drive the insured vehicle. If an excluded person operates your car and causes an accident, your insurance won’t pay for damages, and you might be personally responsible for all costs. This applies regardless of intent or circumstances, even if you were helping someone by lending them your car. Carefully review your policy to ensure you know who is covered and understand the financial risks associated with excluded drivers.

4. Business or Rideshare Use

More Texans are using their vehicles for side hustles, whether it’s delivering food, driving for a rideshare app, or using their truck for business errands. But here’s the catch: Standard auto policies exclude coverage for business or commercial use.

That means if you’re in an accident while delivering a pizza or driving a passenger, your insurer can deny the claim entirely. Rideshare and delivery companies may provide limited coverage, but there are often gaps between personal and commercial policies. If you earn money with your vehicle, be sure to add a rideshare or business-use endorsement, or consider a commercial auto policy when getting Texas car insurance quotes.

5. No Gap Insurance

If you lease or finance your vehicle, you might want to consider gap insurance. This covers the difference between your car’s actual cash value, i.e., what the insurer will pay if it’s totaled, and the balance you still owe on your loan or lease.

Let’s say you owe $35,000 on a car worth $28,000. If it’s totaled in an accident, your insurer pays $28,000, but you’re still stuck paying the $7,000 balance out of pocket. Gap insurance, which usually costs only a few dollars per month, prevents that scenario.

6. Aftermarket Modifications Not Declared

If there’s one thing Texans love, it’s customizing their trucks and cars with lift kits, aftermarket rims, custom paint jobs, or upgraded sound systems. And while you might have quality, cheap car insurance in Texas, keep in mind that your standard insurance policies usually don’t cover aftermarket modifications unless you’ve declared them and purchased extra coverage.

If your customized vehicle is stolen or totaled, your insurer may only reimburse you for the factory value and not the thousands you invested into those upgrades. Always notify your insurer of mods, and ask about custom parts and equipment coverage.

7. Borrowed or Rental Cars

Renting a car for a trip? You may assume your auto insurance automatically extends to borrowed or rental vehicles. But that’s not always the case. Some policies limit or reduce coverage when driving a rental car, while others may not provide coverage at all.

If you frequently rent cars for work trips or holiday travel, you’ll want to confirm how your policy applies. In some cases, you can purchase the rental company’s insurance or add a rental car endorsement to your policy. Otherwise, a wreck in a borrowed or rented vehicle could become an expensive out-of-pocket ordeal.

If you’re a Texas driver, you face unique risks in the fall, but the biggest danger may be hidden in your own policy. Low liability limits, missing coverage for uninsured drivers, or overlooked exclusions can all cost you thousands when the unexpected happens.