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An insurance limit, also known as policy limit, is the maximum amount of money an insurance company will pay out for a particular type of coverage, such as liability coverage or property damage coverage. Insurance limits are typically set in advance by the insurance company and stated in the insurance policy contract. Once the insurance limit is reached, the insured party will be responsible for any additional costs or damages. Insurance limits are important to consider when selecting an insurance policy, as they can impact the level of coverage and protection an individual or business has in the event of a covered incident.

Requirements in Texas:

In Texas, the state requires drivers to carry minimum amounts of liability insurance coverage to legally operate a vehicle. The minimum liability coverage limits for auto insurance in Texas are often referred to as the “30/60/25” limits, which means:

  • $30,000 for bodily injury or death to one person in an accident
  • $60,000 for bodily injury or death to two or more persons in an accident
  • $25,000 for property damage in an accident

While these are the minimum requirements, they may not be sufficient in the event of a serious accident. Drivers may want to consider purchasing higher limits of liability coverage or additional types of insurance, such as underinsured or uninsured motorist coverage, to ensure they are adequately protected in case of an accident.

Recommended Limit for Full Coverage:

The recommended limits for full coverage can vary depending on the individual’s financial situation, the value of their assets, and their potential liability. However, insurance experts generally suggest having liability limits of at least $100,000 per person and $300,000 per accident, with additional coverage for property damage. Some also recommend having uninsured/underinsured motorist coverage with the same limits to protect against accidents caused by drivers with insufficient insurance. Ultimately, it’s important to carefully consider your individual circumstances and consult with an insurance professional to determine the appropriate coverage limits for your specific needs.