# Policy limits

> Policy limits are the most an insurance policy will pay for one claim or one accident. See how limits work and what happens when losses are larger.

Canonical page: https://accidentclaimfacts.com/glossary/policy-limits/  
Last reviewed: October 29, 2026 by the Accident Claim Facts editorial team  
General information, not legal advice. Talk to a licensed attorney in your state.

## Quick answer

Policy limits are the most an insurance policy will pay for one claim or one accident, no matter how large the losses are.

## In a car accident claim

Bodily injury liability limits are often written as two numbers: a limit per person and a limit per accident. Each state sets a minimum. In Texas the minimum is $30,000 per person and $60,000 per accident for injuries, plus $25,000 for property damage. Drivers can buy more.

When losses are larger than the at-fault driver's limits, people look to other sources: their own underinsured motorist coverage, other people or companies who share the blame, such as an employer or a trucking company, and in some cases the driver personally. 20 states and Washington, DC, require uninsured or underinsured motorist coverage. When several people are hurt, they share the per-accident limit. A time limited demand sometimes asks the insurer to pay its full limits by a deadline. Our guides to [settlement negotiation](https://accidentclaimfacts.com/claim-process/settlement-negotiation/) and [demand letters](https://accidentclaimfacts.com/claim-process/demand-letter/) explain how limits shape a claim.

## Example

> **Example:** Three people are hurt when a driver with the Texas minimum policy runs a red light. The policy pays at most $30,000 to any one person and $60,000 in total for all of their injuries, so the three claims compete for the same money. Their own underinsured motorist coverage, if they have it, may pay more.

## Related terms

- [Bodily injury liability](https://accidentclaimfacts.com/glossary/bodily-injury-liability/)
- [Uninsured motorist coverage](https://accidentclaimfacts.com/glossary/uninsured-motorist-coverage/)
- [Stacking](https://accidentclaimfacts.com/glossary/stacking/)
- [Bad faith](https://accidentclaimfacts.com/glossary/bad-faith/)

## FAQ

### How do I find out the other driver's policy limits?

The insurer handling the claim is the usual place to ask. Whether it must tell you before a lawsuit depends on the state; once a lawsuit is filed, insurance coverage is usually part of the information the sides exchange.

### What happens if my damages are more than the policy limits?

The insurer usually will not pay more than its limits. Other sources may include your own underinsured motorist coverage, other people or companies who share the blame, or the at-fault driver personally.

## Sources

- [Texas Department of Insurance, Auto insurance guide](https://www.tdi.texas.gov/pubs/consumer/cb020.html) — Texas minimum liability limits
- [Insurance Information Institute, Facts + Statistics: Uninsured motorists](https://www.iii.org/fact-statistic/facts-statistics-uninsured-motorists) — states requiring UM or UIM coverage