What are the three numbers on my car insurance policy that read 100/300/50?
You've seen the series of numbers as part of your auto insurance before: 25/50/15, or perhaps 15/30/5. Have you ever wondered what that set of three numbers refers to? Those are the limits of liability on your car insurance policy.
Liability coverage is divided into three categories: bodily injury per person, bodily injury per accident, and property damage. These numbers represent the maximum dollar amounts your car insurance company pays on a claim when you are found at-fault in an accident that results in bodily injury and property damage.
How to read liability limits
If the limits of liability on your policy are set at 100/300/50, and you are found at-fault in an accident, your car insurance company is obligated to pay the claim accordingly:
- Bodily injury per person: 100 refers to $100,000 and is the maximum amount to be paid for each person injured in the other vehicle in an accident. Should two people in the other vehicle sustain bodily injuries in the amounts of $90,000 and $100,000, these amounts would be fully covered by your car insurance policy because each amount is $100,000 or less. Any amount exceeding the limit is your responsibility as an out-of-pocket expense.
- Bodily injury per accident: 300 or $300,000 equals the total amount that is paid toward bodily injury. The bodily injury amounts of $90,000 and $100,000 combined do not exceed $300,000, so you are fully covered.
- Property damage: What if the vehicle driven by the other person is totaled and damages are estimated at $58,000? Because this amount is in excess of the liability limit for property damage, 50 or $50,000, you are obligated to pay the remaining $8,000 after your car insurance company pays the first $50,000 in property damage.
Minimum liability coverage requirements are compulsory in most states and differ from state to state. However, minimum liability coverage amounts can be increased to ensure you have ample coverage to avoid paying out-of-pocket expenses. Though the minimum may satisfy state requirements, it may not be enough if a lawsuit is brought against you for damages that exceed the limits of your liability coverage. Without sufficient coverage everything you own is at risk--increasing the minimum can help avoid financial hardship.