August 25th, 2011
Most of us have seen such numbers on our car insurance forms. They look like algebra questions from high school we forget how to answer:
And while the numbers don’t represent algebraic formulations, they do represent equations of a different sort. So what do each of the numbers mean? And which set offers the best deal?
The first number on your car insurance policy represents the “bodily injury per person” that your carrier will pay out if you are in an at-fault accident. So, for example, if you own a 25/50/15 policy the “25” means that your carrier will pay out up to $25,000 for each person injured in an accident that was your fault. Anything above $25K in this example -- comes out of your pocket.
The second number refers to the total “bodily injury per accident,” meaning the most your policy will pay out in the case of an at-fault accident. To clarify, let’s once again use the 25/50/15 policy example. According to the first number, 25, the policy will pay up to $25,000 for each person hurt in an at-risk accident. The second number, in this case 50, means that if more than two people needing maximum care are involved in the accident, you’ll be responsible for paying out the remainder of the damages to those hurt. The 100/300/50 policy above would cover three people up to $100K each. Or nine people as long as the total was less than $300K and no individual needed more than $100K.
The last figure signifies the amount of property damage your policy will pay out. The 25/50/15 policy-holder is covered up to $15,000 for damaged property in an at-fault accident. In most cases the property is the car(s) of the other driver(s) or a home if your vehicle somehow jumps the curb.
Different states have different liability coverage limits and you usually hear these numbers in the context of states, not necessarily your policy. Your policy quote will almost always have your state’s minimum requirements factored in to the price of the monthly premiums; state’s with higher minimums will have drivers who have to pay a bit more every month. Nevertheless, you can certainly ask your provider for higher coverage limits that go above and beyond what the state mandates if you wish to have greater insurance in the cause of an accident.