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Liability coverage explained

Liability coverage pays for harm you cause to other people. Understanding limits tells you how much protection you actually have.

5 min read · Last reviewed 2026-10

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What liability coverage pays

The Texas Department of Insurance describes liability insurance as paying for injuries to the other party and damage to the other vehicle resulting from an accident you caused. It also pays if the accident was caused by someone covered by your policy, including a driver using your car with your permission.

Liability coverage does not pay to repair your own car or treat your own injuries. Other coverages handle those.

Reading split limits

Split limits show three separate caps. In 100/300/50, the first number is the most paid for one injured person, the second is the most paid for all injured people in one accident, and the third is the most paid for property damage.

Choosing limits

  • Think about the income and savings that would be at risk if you were held responsible for a serious crash.
  • Ask for quotes at more than one limit level so you can see how the price changes.
  • TDI points out that minimum limits might be too low if you cause a multi-vehicle accident or the other driver's car is totaled.
  • Compare quotes only when the limits and deductibles match.

Questions

Does liability cover my passengers?

That depends on your policy and your state's rules, including no-fault coverage in some states. Ask your insurer how injuries to your passengers are handled.

Does liability pay for my own car?

No. Damage to your own vehicle is handled by collision or comprehensive coverage.

Sources

Informational only. Rules and policy terms change and differ by state and insurer. Confirm details with your policy, your insurer or your state insurance department.

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