(a) This section does not apply to a municipality covered by § 142.007.
(b) A municipality shall provide for insuring each peace officer and fire fighter in its employ against liability to third persons arising out of the operation, maintenance, or use of a motor vehicle owned or leased by the municipality.

(c) The liability coverage provided under this section must be in amounts not less than those required by Chapter 601, Transportation Code, to provide proof of financial responsibility.
(d) The municipality may elect to be self-insured or to reimburse the actual cost of extended automobile liability insurance endorsements obtained by a peace officer and fire fighter on an individually owned automobile liability insurance policy. The extended endorsements must:
(1) be in the amount required by Subsection (c); and
(2) extend the coverage to include the operation and use of vehicles by a peace officer or fire fighter in the scope of the officer’s or fire fighter’s employment.
(e) If the reimbursement method is used, the municipality may require that a peace officer or fire fighter who operates and uses a motor vehicle present proof that an extended coverage endorsement has been purchased and is in effect for the period of reimbursement.
(f) In this section, “motor vehicle” means any motor vehicle for which motor vehicle automobile insurance may be written under Subchapter A, Chapter 5, Insurance Code.