How does the manual's glossary define liability insurance?
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A.
It pays to repair or replace your own vehicle after a collision.
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B.
It covers your losses regardless of who caused the crash.
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C.
It pays others for damage or injury you cause when you are at fault. Correct
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D.
It pays your medical bills when a driver with no insurance hits you.
The answer is "It pays others for damage or injury you cause when you are at fault."
The glossary defines liability insurance as coverage that pays others for damages the insured is legally obligated to pay when at fault. The collision-repair pick is the glossary's separate entry for collision insurance, which covers the at-fault driver's own car.
The traps in the wrong answers
A. It pays to repair or replace your own vehicle after a collision.
This answer describes collision insurance, a separate glossary entry. It swaps the coverage that protects the at-fault driver's own car for the coverage that protects the people they harm.
B. It covers your losses regardless of who caused the crash.
This answer describes no-fault insurance, a separate glossary entry. It applies a no-fault-state assumption to a Texas fault-based coverage that turns on who caused the crash.
D. It pays your medical bills when a driver with no insurance hits you.
This answer describes uninsured motorist insurance, which protects the insured under their own policy when a driver with no insurance causes the crash; liability insurance instead pays others when the insured is at fault. It reads liability as the coverage that responds when another driver is at fault, missing that the glossary uses liability for what the insured pays out when the fault is theirs.
This question tests your knowledge of Insurance & Financial Responsibility in Texas. Source: Texas Driver Handbook, "Appendix A: Glossary of Terms," p.73..
Related Texas questions
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