Casualty and liability
Liability limits
Liability limits cap what an insurer pays for covered liability, expressed either as split limits for each person and each accident or as a single combined limit for all covered damages.
Reviewed September 2026 · Exam outline effective September 1, 2026
In plain English
Split limits assign separate ceilings: a maximum per injured person, a maximum for all bodily injury in one accident, and a separate maximum for property damage. Each ceiling operates independently.
A combined single limit provides one pool for bodily injury and property damage together. The same accident can produce different available amounts depending on which structure the policy uses.
Why the exam tests it
Multi-claimant auto scenarios are a standard exam device, and they cannot be answered without applying the correct limit structure.
The trap
Applying the per-accident limit to a single claimant, or forgetting that a per-person limit caps that individual even when the per-accident figure is far larger.
Worked example
Split limits of 100,000 per person and 300,000 per accident apply to a crash injuring four people. No single claimant recovers more than 100,000 in bodily injury, and all bodily injury together is capped at 300,000.
Full course
Study this with the complete Texas All-Lines course
This concept is covered in depth in the "Personal, Commercial Auto & Uninsured Motorists" lesson, alongside every other topic on the content outline.
Related terms
- Bodily injuryBodily injury is physical harm to a person, including sickness or disease and, where the policy so provides, death resulting from that harm.
- Property damageProperty damage in liability terms is physical injury to tangible property, including resulting loss of use, for which the insured may be legally responsible.
- Policy limitA policy limit is the maximum amount an insurer will pay for a covered loss under a particular coverage, stated on the declarations page.
- OccurrenceAn occurrence is an accident, including continuous or repeated exposure to substantially the same harmful conditions, that triggers liability coverage.
Exam topics using this term
- Auto liability coverage on the Texas All-Lines examHow split limits work, how bodily injury and property damage liability differ, and why the exam separates liability from first-party auto coverages.
- Uninsured and underinsured motorist coverage on the Texas All-Lines examHow these first-party coverages respond when the at-fault driver cannot pay, and why fault still has to be established.
Sources
- Pearson VUE — Texas Department of Insurance licensing exams
Scheduling, candidate handbook, content outlines, test-center rules, and application timing. Reviewed 2026-07-21.
Requirements, fees, forms, exam details, and deadlines can change. Verify the current rule with the linked authority before scheduling, applying, renewing, or handling a real claim.
For exams on or after September 1, 2026. If your exam is scheduled earlier, use the outline that applies to your exam date. Texas Exam Academy is independent exam preparation and is not affiliated with or approved by the Texas Department of Insurance or Pearson VUE. Verify current eligibility, fees, forms, and requirements with the responsible authority.