What Does “Liability Only” Insurance Mean After an Accident?
If you have a liability-only insurance policy, it’s important to understand exactly what it covers—and what it doesn’t—after an accident.
Coverage Explained
A liability-only policy is primarily designed to protect your assets if you are sued.
Your insurance company will defend you if someone sues you for injuries or damages you allegedly caused.
They will pay up to the policy limit to resolve claims or settle with the injured party.
Essentially, the insurance company prevents someone from going after your personal property, savings, or wages.
For example, if you purchased a state-minimum policy in Texas—$30,000 for bodily injury per person—your insurer will pay up to $30,000 if the other party sues you.
What Liability-Only Insurance Doesn’t Cover
Liability-only insurance does not cover your own damages. This means:
Your car repairs after a collision won’t be paid for.
Your medical bills won’t be covered if you are injured.
Towing or rental car costs won’t be reimbursed.
If you crash into a pole or another vehicle and it’s your fault, your policy won’t help you recover your own losses. It only steps in when you are facing legal claims from others.
Why Additional Coverage May Be Important
Liability-only insurance is the bare minimum legal requirement in Texas, but it leaves gaps. To fully protect yourself, consider:
Collision coverage – pays for repairs to your vehicle after an accident.
Comprehensive coverage – protects against non-collision events like theft or natural disasters.
Uninsured/underinsured motorist coverage – covers you if the other driver doesn’t have sufficient insurance.
These coverages ensure that your own damages are protected, not just your legal liability.
Bottom Line
A liability-only policy is designed to defend you and protect your assets if someone sues, but it won’t pay for your car, your injuries, or other out-of-pocket expenses. Understanding the limitations of liability-only coverage is critical after an accident, and adding additional insurance coverage can provide peace of mind and financial protection.
