This is one of those yes and no questions.
Yes: The sensor could be sending bad info the ECU telling it its cold or hot and depending on that answer could lead to huge pressure problem resulting in a break in a line
No: You may need to replace hoses/coolant tank/sensor
What type of coolant sensor? The below answer is for the coolant LEVEL sensor. The coolant TEMPERATURE sensor on my vehicle is located just next to the thermostat housing. On the front top center area of the engine just behind the radiator. Follow the coolant hoses if you have trouble. On my 1995 Jeep Grand Cherokee the sensor is located on the top of the plastic coolant reservoir tank. Look for a small (2-wire?) electrical connector.
Low coolant or bad sensor
on a 1999 jeep grand cherokee where is the coolant fan relay
There are two separate sensors that play here. the "coolant temperature sensor" and "coolant LEVEL sensor". I suggest confirming which of these was replaced, as it is very common for them to be confused. likely you will find the coolant sensor that was replaced was the one on the engine (temperature); The LEVEL sensor is mounted either in the coolant resivoir or in the radiator. Probably just need the proper sensor replaced.
On the coolant overflow bottle that in on the passenger side of the engine.
sensor is in the plastic reserve on the float.
The coolant temperature sensor is located on the gooseneck follow the radiator hose on the top of the radiator to the engine on drivers side of car its a plug with 2 wires the sensor screws into the gooseneck
Don't worry about it those screens are all faulty & blink coolant temp sensor.
When you add engine coolant to a 2003 Jeep Grand Cherokee because the low coolant indicator has come on, you should add to the reserve tank and the radiator if they are low. Sometimes, just the reserve tank needs filled.
On the gooseneck where the upper radiator hose attaches to the engine.
if it is a 96 like mine it is on the top of the coolant resovoir. it is rounnd and has an electrical connector attached to it
Not sure if this helps, but the book I have on my 1996 Jeep Grand Cherokee says that their are 2 of these sensors, I have not had the time to look for the second one. I have the same problem.