Understanding Liability Insurance Requiring automobile coverage and proof of insurance is not a foreign concept to the inhabitants of Texas. Residents of the Lone Star State must follow the financial responsibility laws which requires all motorists to be able to pay for any damages they cause when involved in a motor vehicle accident, and must also carry proof of an automobile policy with them in their automobile. This necessary protection is referred to as liability coverage, and has specific limits that must be met in order to fulfill the state requirements.As of January 1st, 2011 all motorists must maintain bodily injury liability of at least ,000 for one person, ,000 for two or more people involved in a single accident, and ,000 for property damage liability. Having these forms of protection in place means that in the event that the insured motorist causes an accident, the medical bills and property damage of the third party individuals whom the driver struck will be paid for by the motorist's insurance company up to the previously mentioned amount.Residents are required to purchase Texas liability insurance to meet the state's requirements of being financially responsible in the event of an accident. Even if such policies were not required by law, residents would still be strongly encouraged to purchase coverage in order to protect themselves financially following a traffic collision.