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New Texas Law Challenges Auto Insurance “Junk” Policies

Posted on 9/6/2013 by with 0 comments

More than a million Texas drivers with limited auto insurance coverage face increased scrutiny under a new state law that aims to shine a light on policies that cover just one driver, not an entire vehicle.

A measure that the Legislature enacted and Gov. Rick Perry signed into law this year requires that insurers who sell “named driver” auto policies disclose the limits of the coverage to drivers. They must also list the names of covered drivers on insurance ID cards they issue to customers.

Under such policies, often called “junk” policies, coverage is restricted to one person listed as the driver. They do not cover family members in the household. That means when family members other than the named driver use a family vehicle, they have no insurance protection.

 

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