Liability Insurance — Texas
Liability insurance pays for injuries and property damage you cause to others in an at-fault accident.
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What Is Liability Insurance Insurance?
Liability insurance is the foundation of every Texas auto policy. It covers bodily injury and property damage you cause to others when you're at fault. The coverage pays the other driver's medical bills, lost wages, vehicle repairs, and legal fees if you're sued. It does not cover your own injuries or vehicle damage.
Who Needs Liability Insurance Insurance?
Every driver who registers a vehicle in Texas must carry liability insurance. Drivers with assets to protect should carry limits well above the state minimum. If you own a home, have retirement savings, or earn a steady income, higher liability limits prevent creditors from seizing those assets after a serious at-fault accident.
Choose liability limits based on your total net worth, not just the state minimum. A common guideline is to carry liability coverage equal to your assets plus two years of income. If the state minimum doesn't reach that threshold, increase your limits.
How Much Does Liability Insurance Insurance Cost?
- Coverage limits above the state minimum increase premiums but reduce personal financial exposure in serious accidents.
- At-fault accidents and traffic violations in the past three to five years raise liability premiums significantly.
- Urban zip codes with higher accident rates and lawsuit frequency cost more than rural areas.
- Younger drivers under 25 and drivers over 70 pay higher liability premiums due to statistical claim frequency.
- Credit-based insurance scores affect liability rates in Texas, with lower scores increasing premiums by 20 to 50 percent.
- Bundling liability coverage with homeowners or renters insurance typically reduces the auto premium by 10 to 20 percent.
