So you have car insurance – take a minute to look at your policy. Do you see numbers that look like this — 100/300/100? What do those numbers mean? It is important that you understand these numbers, what they mean and if you have enough liability insurance.
Liability Limits – WHY YOU SHOULD CARE
Auto Liability Insurance pays damages if it is determined that you hurt someone or damaged his property in an car accident. Example — you ran a stop sign and hit another car. The other car is damaged. What about the people in the other car? This is why you should have ample Liability Insurance.
Understanding The Numbers
Bodily Injury Limits: These are the first numbers you usually see. Example 100/300. This means the most the policy will pay is $100,000 per person up to $300,000 per accident. If an injured person has injuries up to $100,000 — your insurance will pay that amount. However, if you have lower liability limits like 25/50 and the person has $100,000 in injuries. The company will pay $25,000 and you are responsible for the remaining $75,000. In this example only one person is hurt. What if two or three people where hurt? The limits are the same. 25K max per person. 50K max per accident. Your policy will not pay more than $50,000. You will be responsible for any remaining costs.
Property Damage Limits: If your policy shows 100/300/100 or 100PD on a separate line – you have $100,000 coverage property damage caused when you ran that stop sign. Some people have state minimum insurance — in many states the property damage limit is $25,000 (or less). That seems like a lot of money. Until you look around at the cars in any parking lot. You will see lots of cars that cost more than $25K. What if you hit two cars? $25,000 does not seem like such a big number. Some accidents do not involve other cars — but buildings.
So why are we sharing this information?
Answer: So you will review your Auto Insurance Policy. Are you properly insured? If you have any questions or concerns — please contact us. We want informed customers and will be happy to review your liability limits with you.
Understand, this is a quick article to make you think about your insurance — not an in depth review of how to achieve appropriate coverage limits. Also, more liability coverage does not always mean a big jump in premium and typically is just a few dollars more.