Texas Legal Glossary · Personal Injury

Policy Limits

Written and reviewed by Shane M. Boasberg, founder of SMB Law, PC · Licensed in Texas since 2003 · Updated October 2026

Definition: Policy limits are the maximum amounts an insurance company will pay under a policy. Texas requires drivers to carry at least 30/60/25 liability coverage: $30,000 per injured person, $60,000 per accident for bodily injury, and $25,000 for property damage.

Also called: coverage limits, liability limits, 30/60/25

What policy limits mean in Texas

Policy limits are the ceiling on what an insurer must pay for a covered loss. Every liability policy states a per-person limit and a per-accident limit for bodily injury, plus a separate limit for property damage. Under Transportation Code § 601.072, the minimum a Texas driver may carry is 30/60/25: $30,000 for each injured person, $60,000 total for all injuries in one crash, and $25,000 for property damage.

Those are floors, not norms. Many drivers carry only the minimum. Commercial policies and umbrella policies run far higher, which is one reason identifying every potential defendant matters.

How it works in practice

The limits often cap what an injured person can actually collect. An insurer’s obligation ends at the limit, and the at-fault driver is personally responsible for anything above it. Most individuals do not have collectible assets, so a $300,000 injury against a $30,000 policy frequently results in a $30,000 recovery from that insurer and no more.

The gap-fillers are the injured person’s own coverages. Underinsured motorist coverage pays the difference between the at-fault driver’s limits and the insured’s own UIM limits. Personal injury protection pays medical bills and lost income regardless of fault. Texas insurers must offer both, and a rejection must be in writing.

Why it matters in your case

Learning the limits early changes strategy. Texas does not require a liability insurer to disclose limits pre-suit, though many do on request, and the information becomes discoverable once a lawsuit is filed. When injuries clearly exceed a small policy, the right move is usually a time-limited Stowers demand for the limits, which shifts the risk of an excess verdict onto the insurer if it refuses.

Example

Three friends in one car are hit by a driver with a 30/60/25 policy near Ben White Boulevard. Each has about $45,000 in medical bills. The per-person limit caps each at $30,000, and the per-accident limit of $60,000 means the three must share that amount. Each receives $20,000 from the at-fault insurer and looks to their own UIM and PIP coverage for the rest.

This entry explains Texas law in general terms and is not legal advice for any specific situation. Statutes and case law change; the date above reflects the last review.