Did Texas's 1984 increase in financial-responsibility minimums automatically raise the liability limits in auto policies already in force?

Texas AG Opinion JM-315: Existing Auto Policy Limits

Plain-English summary

The question was whether auto liability policies already in force had to be read as providing at least $15,000 of coverage after Texas increased its minimum proof-of-financial-responsibility amounts on January 1, 1984. The opinion stated: “You have asked whether automobile liability insurance policies in effect at the time Senate Bill No. 538 ... became law on January 1, 1984, must be read thereafter to provide at least fifteen thousand dollars ($15,000) coverage against liability regardless of the stated policy limits.” Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0315.pdf

JM-315 concluded that the statute did not automatically increase the limits written into existing policies. Its summary stated: “The effect of Senate Bill No. 538 ... was not to automatically increase the limits of existing automobile liability policies to a minimum of $15,000 on January 1, 1984.” Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0315.pdf

Instead, a policy that had been adequate under the former minimums continued to serve as adequate statutory proof for a transition period. Section 7 said such a policy “shall continue to be adequate proof of financial responsibility until it terminates or one year from its issuance, whichever is sooner.” Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0315.pdf

The opinion distinguished statutory proof of financial responsibility from the damages a driver could owe. It stated: “The Safety Responsibility Law does not affect the actual amount of damages for which a motorist may be held liable by an injured party in court.” Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0315.pdf

Currency note

This opinion was issued in 1985. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Did the 1984 law rewrite an existing policy's dollar limits?

No. JM-315 said the law's effect “was not to automatically increase such policy limits, but, rather, to obviate the need to increase them before a later time.” Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0315.pdf

How long did a previously adequate policy remain acceptable proof?

It remained adequate until the policy terminated or one year passed from its issuance, whichever occurred first. Section 7 used the words “until it terminates or one year from its issuance, whichever is sooner.” Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0315.pdf

Did it matter that a lower-limit policy was written after the Legislature passed the bill?

Not if it was written before January 1, 1984, remained in effect on that date, and had not been issued a full year earlier. The opinion stated that the timing of passage was “unimportant, so long as it was written prior to January 1, 1984 and remained in effect on that date, not having been issued as much as a full year earlier.” Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0315.pdf

Did satisfying the proof requirement cap a driver's liability for an accident?

No. The opinion said the law “does not affect the actual amount of damages for which a motorist may be held liable by an injured party in court.” Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0315.pdf

Did the same transition analysis apply to the minimums scheduled for 1986?

Yes. JM-315 stated: “Our conclusion with respect to the provision effective January 1, 1984, also applies to the 1986 changes because of the clear legislative intent.” Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0315.pdf

Background and statutory framework

Before the amendment, article 6701h required proof of the ability to respond in damages in amounts of $10,000 for injury or death to one person, $20,000 for injuries to more than one person, and $5,000 for property damage. The opinion quoted the former one-person amount as “Ten Thousand Dollars ($10,000)” and then identified the other amounts as “$20,000 and $5,000, respectively.” Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0315.pdf

The 1983 legislation raised those minimums to $15,000, $30,000, and $15,000 effective January 1, 1984, with another increase to $20,000, $40,000, and $15,000 effective January 1, 1986. JM-315 stated that the old amounts “have been raised to $15,000, $30,000, and $15,000, respectively, effective January 1, 1984, and to $20,000, $40,000, and $15,000, effective January 1, 1986.” Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0315.pdf

The opinion described the Safety Responsibility Law as a regulatory measure tied to highway use. It said the law “denies the privilege of using Texas highways to a motorist unless the motorist can show financial responsibility in amounts specified by law.” Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0315.pdf

Citations and references

• Article 6701h, V.T.C.S., the Safety Responsibility Law
• Senate Bill No. 538, 68th Legislature, Regular Session
• Acts 1983, 68th Leg., ch. 535 at 3122
• Gillaspie v. Department of Public Safety, 259 S.W.2d 177 (Tex. 1953), cert. denied, 347 U.S. 933 (1954)
• Popham v. Patterson, 51 S.W.2d 680 (Tex. 1932)
• Norton v. Kleberg County, 231 S.W.2d 716 (Tex. 1950)
• Attorney General Opinion H-752 (1975)

Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0315.pdf

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-0315
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0315.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain. The linked PDF is authoritative.

The Attorney General of Texas

May 10, 1985

Honorable Bill Messer
Chairman
Calendars Committee
Texas House of Representatives
P. O. Box 2910
Austin, Texas 78769

Opinion No. JM-315

Re: Effect on existing policies of January 1, 1984, increase in required Proof of Financial Responsibility under article 6701h, V.T.C.S.

Dear Representative Messer:

You have asked whether automobile liability insurance policies in effect at the time Senate Bill No. 538 (Sixty-eighth Legislature, Regular Session) became law on January 1, 1984, must be read thereafter to provide at least fifteen thousand dollars ($15,000) coverage against liability regardless of the stated policy limits.

The legislation, Acts 1983, 68th Leg., ch. 535 at 3122, amended article 6701h, V.T.C.S., the Safety Responsibility Law. Basically, the bill changed the definition of “Proof of Financial Responsibility,” which had previously required motorists to show

[p]roof of ability to respond in damages for liability, on account of accidents occurring subsequent to the effective date of said proof, arising out of the ownership, maintenance or use of a motor vehicle, in the amount of Ten Thousand Dollars ($10,000) because of bodily injury to or death of one person in any one accident. . . .

and in amounts of $20,000 and $5,000, respectively, for injuries to more than one person and for property damage. See Acts 1963, 58th Leg., ch. 506, §1, at 1320. Under the new provisions, those minimum amounts have been raised to $15,000, $30,000, and $15,000, respectively, effective January 1, 1984, and to $20,000, $40,000, and $15,000, effective January 1, 1986. V.T.C.S. art. 6701h, §1.

Section 7 of Senate Bill No. 538 stated:

This Act takes effect January 1, 1984, provided that any insurance policies issued prior to January 1, 1984, which proved financial responsibility prior to that date shall continue to be adequate proof of financial responsibility until it terminates or one year from its issuance, whichever is sooner; and any insurance policy issued in 1985 which proved financial responsibility prior to January 1, 1986, shall continue to be adequate proof of financial responsibility until it terminates or one year from its issuance, whichever is sooner. (Emphasis added).

The Safety Responsibility Law does not affect the actual amount of damages for which a motorist may be held liable by an injured party in court; it is a regulatory measure that denies the privilege of using Texas highways to a motorist unless the motorist can show financial responsibility in amounts specified by law. See Gillaspie v. Department of Public Safety, 259 S.W.2d 177 (Tex. 1953), cert. denied, 347 U.S. 933 (1954). Thus, a failure to furnish evidence of proof of financial responsibility does not insulate a motorist from financial responsibility for any damages his use of Texas highways may occasion, but such a failure can cause the offending motorist to lose his driving privileges and will make him subject to criminal penalty. V.T.C.S. art. 6701h, §§1C, 1E.

In our opinion, the legislature has clearly indicated its intent that no motorist should lose his driving privileges or be subject to criminal penalty for failure to provide “Proof of Financial Responsibility” if he remained insured after January 1, 1984, under an insurance policy that was adequate on December 31, 1983, to prove such financial responsibility under article 6701h as it then read; and that such policy would thereafter continue to furnish adequate proof of financial responsibility under the statute until the policy terminated, or until the expiration of one year from its issuance, whichever occurred first.

No part of the act became law before January 1, 1984, and inasmuch as an act speaks as of the time at which it takes effect, no one was required to take notice of it before that time. Popham v. Patterson, 51 S.W.2d 680 (Tex. 1932). The fact that an insurance policy reflecting policy limits of only $10,000 was first written after Senate Bill No. 538 was passed in 1983 is unimportant, so long as it was written prior to January 1, 1984 and remained in effect on that date, not having been issued as much as a full year earlier. A provision effective January 1, 1986 will again raise minimum required amounts. Our conclusion with respect to the provision effective January 1, 1984, also applies to the 1986 changes because of the clear legislative intent. Cf. Attorney General Opinion H-752 (1975).

The effect of Senate Bill No. 538 becoming law was not to automatically increase such policy limits, but, rather, to obviate the need to increase them before a later time. See Norton v. Kleberg County, 231 S.W.2d 716 (Tex. 1950).

SUMMARY

The effect of Senate Bill No. 538, Sixty-eighth Legislature, Regular Session, was not to automatically increase the limits of existing automobile liability policies to a minimum of $15,000 on January 1, 1984, but rather was to obviate the need to immediately increase such limits in order to satisfy the financial responsibility requirements of article 6701h, V.T.C.S.

Very truly yours,

JIM MATTOX
Attorney General of Texas

TOM GREEN
First Assistant Attorney General

DAVID R. RICHARDS
Executive Assistant Attorney General

ROBERT GRAY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Bruce Youngblood
Assistant Attorney General

APPROVED:
OPINION COMMITTEE

Rick Gilpin, Chairman
Jon Bible
Colin Carl
Susan Garrison
Tony Guillory
Jim Moellinger
Jennifer Riggs
Nancy Sutton
Bruce Youngblood