Reading the three numbers
Take 25/50/25 as an example format. The first number is the most the policy pays for bodily injury to one person, here $25,000. The second is the most it pays for bodily injury to everyone in one accident, here $50,000. The third is the most it pays for property damage in one accident, here $25,000. Your state's minimum may be different.
Combined single limits
Some policies use a single combined limit instead, such as one amount that applies to all bodily injury and property damage from an accident. A combined limit can be more flexible because it is not divided into separate caps.
When limits run out
If a claim exceeds your limits, the injured party can seek the difference from you personally. Medical care and vehicle repairs can be expensive, and a crash involving several people or a newer vehicle can exceed minimum limits quickly.
How to choose
- Consider what you own and could lose in a lawsuit
- Ask for quotes at two or three limit levels
- Compare the price difference to the extra protection
- Consider an umbrella policy if you have significant assets
- Check whether your state requires uninsured motorist coverage at matching limits
Limits and price
Higher limits cost more, but the increase from minimum limits to moderate limits is sometimes smaller than drivers expect. The only way to know is to compare quotes for your situation.
Where to find your current limits
Your declarations page lists the limits for each coverage. If you cannot find it, ask your insurer for a copy before you shop.
Frequently asked questions
Do limits apply per accident or per year?
Auto liability limits generally apply per accident, not per policy year.