What does 100 300 50 mean on an insurance policy?

The numbers 100/300/50 are common liability coverage limits you’ll see on auto insurance policies. But what do they actually mean? Here’s a detailed breakdown of what each part of a 100/300/50 policy covers:

Auto Liability Insurance Overview

Liability insurance is a required component of auto insurance in almost every state. It covers injuries or damage that you cause to other people and their property when you are at fault in an accident.

Without enough liability coverage, you could be sued or held personally responsible for massive accident bills. That’s why understanding what your liability limits mean is so important.

Liability insurance has three components:

• Bodily injury liability per person
• Bodily injury liability per accident
• Property damage liability

The coverage limits and pricing are listed separately for each part. A typical format looks like this:

100/300/50

Now let’s examine what each of these numbers covers in your policy.

Bodily Injury Liability Per Person (100)

The first number represents the limit for bodily injury liability per person.

With a 100/300/50 policy, this limit is $100,000.

Bodily injury liability covers medical expenses for people injured in an accident that you caused.

If one person is injured and requires $150,000 in medical treatment, your insurer will only pay up to the $100,000 limit under this part of your policy. You would be responsible for the additional $50,000.

Covered expenses include:

• Hospital bills
• Doctor visits
• Prescriptions
• Physical therapy
• Rehabilitation
• Long-term nursing care

In addition to medical costs, the per person limit covers:

• Lost wages from missing work
• Income loss due to disability
• Pain and suffering
• Legal fees

So $100,000 is the maximum payout available under this portion of your policy for each individual you injure.

Higher limits provide more protection. But this comes at a cost – your insurance premiums increase as your coverage limits go up.

Bodily Injury Liability Per Accident (300)

The second number represents the per accident limit.

With 100/300/50 coverage, this limit is $300,000.

The per accident maximum caps payouts for the entire incident, regardless of how many people were injured.

For example, let’s say you collide with another vehicle and injure:

• Driver A who racks up $180,000 in medical bills
• Passenger B who incurs $150,000 in treatment costs
• Passenger C who needs $120,000 of care

Their combined expenses add up to $450,000. But under your 100/300 policy, the insurer will only pay out $300,000 total for this accident.

Each person would receive up to the $100,000 per person limit. But the total payout cannot exceed the $300,000 per accident cap.

You would be on the hook for the remaining $150,000 in this scenario.

Again, higher per accident limits provide more protection at the cost of higher premiums. So balance your coverage needs with your budget.

Property Damage Liability (50)

The third number is your property damage liability limit per accident.

With a 100/300/50 policy, this limit is $50,000.

Property damage liability covers repair or replacement costs for other parties’ vehicles and property damaged in an at-fault accident.

For example, damages you might be liable for include:

• The other driver’s car
• A building or fence you hit
• Utility poles and equipment
• Landscaping
• Guard rails

Your insurer will pay up to $50,000 total for all property damage per accident under this coverage.

Damage to your own vehicle would be covered under collision insurance, a separate component of your policy.

Why 100/300/50 is Recommended

Most experts recommend 100/300/50 as a good minimum level of liability protection. Here are some reasons this limit is suggested:

• Meets state minimums – All states require drivers to carry a minimum amount of liability insurance. 100/300/50 meets the minimum in every state. Lower limits like 25/50/25 may not be sufficient.

• Covers severe accidents – The higher limits provide strong coverage in case of a major accident with injuries and property damage exceeding lower limits.

• Affordable premiums – 100/300/50 does cost more than lower limits like 25/50/25. But the difference is usually only $10-20 per month.

• Peace of mind – Having higher limits means less risk of paying out-of-pocket if you exceed lower limits and get sued. This can prevent financial ruin.

• Industry standard – Most insurance companies recommend 100/300/50 as a good baseline level for liability. It’s not overly excessive or insufficient.

Of course, your specific situation may call for different limits. But for many drivers, 100/300/50 strikes a nice balance of cost and coverage.

How Much Liability Coverage Do You Need?

Choosing appropriate liability limits involves weighing several factors:

Assets you have at risk – If you have significant assets, you may want 250/500/250 or higher limits. This protects your net worth from lawsuits.

State requirements – Make sure you meet your state’s minimum liability limits. All states require coverage, starting as low as 25/50/25 in some places.

Likelihood of an at-fault accident – Higher risk drivers should consider higher liability limits to offset the increased chance of an at-fault crash.

Vehicle value – If you collide with an expensive luxury car, higher property damage limits ensure you can cover the repair bill.

Injuries likely in an accident – Causing severe injuries requiring extensive medical treatment and rehabilitation means you need robust bodily injury limits.

Your budget – Auto insurance is a major expense for many families. Balance liability limits with premium costs your budget can handle.

In the end, the level of liability coverage you select is a personal choice. But you should consider all the factors above before making a decision.

Example Scenarios Illustrating Liability Limits

Here are some examples that show how different liability limits apply in hypothetical accident scenarios:

Example 1: Minor fender bender with 25/50/25 coverage

• You’re at fault in a minor rear-end collision at low speed.
• The other driver’s car has $1,500 in damage. Your car is unharmed.
• The driver suffers a minor soft tissue neck sprain, incurring $3,000 in medical bills.
• Your policy limit is 25/50/25.

Payout under your policy

• Bodily injury liability limit per person: $3,000 payout
• Property damage liability limit: $1,500 payout
• Total payout by your insurer: $4,500

This small accident falls within low 25/50/25 liability limits. You have no out-of-pocket costs.

Example 2: Major accident with 100/300/50 coverage

• You run a red light and T-bone another vehicle.
• The driver suffers broken ribs and a fractured pelvis totaling $120,000 in medical bills.
• The passenger ruptures their spleen and needs surgery costing $150,000.
• You also cause $65,000 in damage to their car.
• Your policy limit is 100/300/50.

Payout under your policy

• Bodily injury liability limit per person: $100,000 to each injured party
• Bodily injury liability limit per accident: $300,000 max payout total
• Property damage liability limit: $50,000 for car repairs
• Total payout by your insurer: $300,000

Your insurer pays the $300,000 policy limit. But you are liable for the remaining $35,000 in medical bills. Higher limits could prevent out-of-pocket expenses in a catastrophic event like this.

Example 3: Totaling an expensive car with 300/500/100 coverage

• You hydroplane and smash into a rare luxury sports car, causing $120,000 in damage.
• Your policy limit is 300/500/100.

Payout under your policy

• Property damage liability limit: $100,000
• Your out-of-pocket cost: $20,000

Even with expanded 300/500/100 bodily injury coverage, your low $100,000 property damage limit leaves you paying $20,000 for repairs. This illustrates the value of high property damage limits when hitting high-value vehicles.

How Much Does 100/300/50 Coverage Cost?

The cost for 100/300/50 limits varies significantly nationwide based on factors like:

• Your age
• Driving record
• Location
• Type of vehicle
• Number of miles driven

But on average, 100/300/50 liability coverage costs $150 to $300 per year depending on the above criteria