What Does Texas Require for Vehicle Insurance?

Over the years, I’ve reviewed Texas’ tax system, the regulatory framework for Texas’ utilities, and the laws that guide hospital funding.

What Does Texas Require for Vehicle Insurance?

With these in mind, I was intrigued to hear about a law that might indicate the future direction of automobile insurance rules: a requirement for Texans to be licensed to drive for a year.

The law was designed to combat “first time uninsured drivers,” the representatives who are serious about preventing fatal car accidents. It requires new drivers to pass a test and then enroll in a program through the State Department of Public Safety. (You may have heard the phrase “48 hours in custody,” meaning that drivers under arrest or apprehended by authorities have 48 hours to demonstrate their ability to drive.)

To be eligible for a license, you need to have received at least one hour of training, passed the test, and participated in an ongoing course. It’s a low bar, and for those with new, often inexpensive vehicles, driving a valid license may make it easier for them to get on the road.

We don’t yet know how the requirement may affect the number of uninsured drivers. But there is a worry that the program may increase the share of young drivers without insurance. For that reason, it’s important to understand that the program has been endorsed by both insurance companies and libertarians. And it has attracted strong opposition from pro-choice groups, arguing that drivers taking it could be coerced into a form of family control over sexuality. (The law contains a loophole: only men must attend the course.)

A recent Texas Tribune report explored the details of the requirement, including the role of churches in increasing the number of young drivers lacking insurance. Apparently, churches are using church programs to drive young men into the program, presumably providing protection against parenthood in exchange for temporary driving privileges.

Among the things that are needed to understand the law is that it’s not simply a matter of regulations for those who can’t afford or don’t want insurance. Those poor souls are free to go uninsured, even though in theory they ought to be able to afford a $300 a month policy. What is new is the requirement that drivers get insurance.

And what I saw in the article did not seem to correspond with the existing state of vehicle insurance regulations. Texas requires both an annual physical, which could not be completed quickly enough to make it possible for drivers to get licensed on the few days available to the Department of Public Safety, and a written exam in which drivers must answer at least 40 multiple-choice questions. Those tests are completed in a month, and only certain applicants are allowed to take them. In theory, the Texas exam could involve sit-down instruction in how to handle a rental car, for example, which could be beneficial, but I wouldn’t imagine it would suddenly become the practical standard for automobile car insurance in Texas.

I suspect that a delay of six to eight weeks between auto insurance exams is sufficient for most drivers.

But what might the sticker shock be that keeps people from taking their exams?

Texas has no requirement for commercial vehicles to carry liability insurance, although apparently they are required to carry minimum safety standards. The legislative rationale for this seems pretty weak to me:

“On the cross streets connecting urban centers and urban crosstown arteries, motorists have to cope with business and residential vehicles, as well as other larger and more hazardous vehicles. Traffic is often backed up because of construction projects, car-pool lanes, or congestion on a trafficway. To avoid these complications, some drivers either decline to carry insurance for personal use or accept coverage for personal use only. They may find the $300 annual premium unaffordable, and others might believe the premiums for private car insurance are too high or they simply don’t feel responsible for additional insurance.”

The Texas practice of car insurance privatization is one of the things that makes it hard to attract businesses to the state and difficult to balance its budget. In any case, the rollout of the new mandate may prove to be long and a test of the vaunted nonpartisan virtues of government.

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