On January 1, 2011, State Law increased the minimum limits coverage amounts for all automobile liability insurance in Texas from $25,000 to $30,000 for bodily injury or death of one person and increased the limit from $50,000 to $60,000 for injury or death for two or more persons.
Insurance companies were not sure whether to make the new, increased coverage effective on January 1, 2011, or just phase the new coverage amount in at renewal the next year.
On November 15, 2010, the Commissioner of the Texas Department of Insurance issued Commissioner's Bulletin #B-0048-10
. What was his instruction? The change is effective on January 1, 2011, but the industry did not have to send out new proof of insurance cards until renewal.
That should have been clear, but for State Farm Mutual Auto Insurance, that wasn't the answer it wanted to hear. So, State Farm ignored the law and will not honor the increased limit on claims that fall between Jan. 1, 2011 and their insured's renewal date.
Here's an example: Debbie Driver has 25/50/25 coverage on December 31, 2010. On January 1, 2011, she is reaching for her purse, crosses the dividing line on the roadway and causes a head-on collision with Paul Plaintiff, who is seriously injured.
Though state law increased the minimum limits of Debbie Driver to 30/60/25 on January 1, 2011, Debbie's insurance carrier, State Farm Mutual Auto, will only honor limits of 25/50/25 because it takes the position that the new 30/60/25 limits do not take effect until Debbie's policy renews later in the year.
I don't know how many injured people settled their policy limits cases for $25,000 instead of $30,000 during that gap period, but every single one has been a victim of misconduct by State Farm Mutual Auto.