Liability insurance is the only auto insurance you must carry in the State of Texas. This covers damage to the other vehicle/s and injuries to other people if you are found at fault. The insurance company will pay the amount for which you are liable, up the limit of your coverage. You are still liable for any amount that exceeds your coverage.
Texas is in the process of rolling out a law to all cities which requires your auto to be towed if you are stopped and have no liability coverage. You are allowed to make a phone call to arrange for transportation but your car will be towed regardless of whether you have alternate transportation or not.
Liability is usually stated in the following form: 25/50/25. The first number refers to the amount in thousands of dollars that is paid for each person in the other auto-the Individual Limit. The second number is the maximum that will be paid for each accident-the Accident Limit. If the liability is $25,000 for 3 people, only $50,000 will be paid by the insurance company because that exceeds the accident limit. You are liable for the remaining $25,000. The last number refers to the amount in thousands for the damage to the other party's property. If they are driving a car that is worth more than $25,000 and the car is beyond repair, you wil be liable for the additional amount.
The amounts of coverage normally offered by insuracnce companies is 25/50/25 (the Texas State Minimum), 50/100/50, 100/300/100, 250/500/250. You can also purchase Single Limit coverage for which the Individual Limit is the same as the Accident Limit.
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