Decoding the 10/20/10 Auto Insurance Coverage

If you are buying or renewing auto insurance, you may come across terminology like “10/20/10” coverage. This refers to a typical split limit liability coverage combination. But what exactly does 10/20/10 mean in auto insurance and why is it important? This article will explain it in simple terms.

What are Liability Limits in Car Insurance?

Liability insurance is a mandatory component of auto insurance in most states. It covers injury or damage you may cause to others when driving your car. Liability coverage has two parts:

  • Bodily Injury (BI) Liability: Covers medical expenses of people injured in an at-fault accident.

  • Property Damage (PD) Liability: Covers repair or replacement costs for others’ damaged property.

Liability insurance pays up to the limits you choose. Higher limits give more protection but cost more. Most states mandate minimum BI and PD liability limits.

What is a Split Limit Policy?

Liability policies are typically written in a split limit format – stated as BI per person/BI per accident/PD per accident.

For example:

  • $25,000/$50,000/$10,000

  • $100,000/$300,000/$50,000

This means there are separate limits set for bodily injury per person, total bodily injury per accident, and property damage per accident.

Split limits give insurers flexibility in structuring coverage. Drivers can customize as per their budget and risk appetite.

Understanding the 10/20/10 Auto Insurance Split

The 10/20/10 split is a common liability coverage combination found in many states. Let’s break it down:

  • 10 refers to $10,000 bodily injury liability per person

  • 20 refers to $20,000 total bodily injury liability per accident

  • 10 refers to $10,000 property damage liability per accident

Here is what the 10/20/10 split actually means:

  • Your policy will pay up to $10,000 for medical bills and related expenses for each person injured in an accident you caused.

  • There is an overall limit of $20,000 per accident for bodily injury claims. This is the maximum the policy will pay cumulatively, regardless of the number of persons injured.

  • Your policy will also pay up to $10,000 for property damage per accident that you are liable for. This applies towards repair or replacement costs for others’ damaged property.

For example, if you collide with another car due to your negligence and:

  • Driver of other car suffers $15,000 in medical bills
  • Passenger has $8,000 in medical expenses
  • Their car is a total loss with repair cost of $12,000

Your 10/20/10 policy will cover:

  • $10,000 towards driver’s medical bills
  • $8,000 for passenger’s treatment
  • $10,000 for value of their damaged car

You will pay remaining $5,000 for driver’s medical costs and $2,000 for property damage from your own pocket.

Why is 10/20/10 Auto Insurance Coverage Important?

The 10/20/10 liability limits allow you to cover costs related to minor accidents you are liable for. However, it offers low protection overall. Here’s why higher limits are better:

  • Medical costs are rising – $10,000 does not go far enough today in case of serious injuries.

  • Lawsuits are expensive – You could be sued for excess damages not covered by liability policy.

  • Property damage can be high – A damaged luxury or performance car can cost much more than $10,000 to repair.

  • You are financially liable for any amount exceeding your policy limits. This can mean wage garnishment or assets being seized.

That’s why it is recommended to carry more than the minimum 10/20/10 liability coverage, especially if you have significant assets to protect.

What are Typical Liability Limits People Buy?

While minimums vary by state, most people buy higher liability car insurance limits.

Coverage Protection Level
10/20/10 Low
25/50/10 Moderate
50/100/25 Intermediate
100/300/100 High

Factors to consider when deciding limits:

  • Your asset level
  • Probability of being sued
  • Umbrella insurance presence
  • Accident history
  • Vehicle type
  • Where you live

Consult an agent to determine adequate liability limits as per your profile and risk comfort. Higher is generally better.

What Happens If I Only Have 10/20/10 Liability?

Choosing just the minimum 10/20/10 liability limits means:

  • You have low protection in case of a major at-fault accident.

  • You will likely end up paying large damages not covered by your policy from your own pocket.

  • Your assets like home, savings, etc. could be seized to pay excess costs via lawsuit.

  • You save on premiums in the short run but face big financial risk long term.

That’s why most experts recommend carrying more than 10/20/10 liability car insurance coverage if possible. It gives you greater financial protection.

What Does 10/20/10 Not Cover?

It is also important to understand what a basic 10/20/10 liability policy does NOT include:

Your own car damage

Your medical bills

Passengers’ injuries

‍♂️ Pedestrians’ injuries

Motorcyclists’ injuries

Rental car costs

Other driver’s lost income

To be fully protected, you need to add coverage like collision, comprehensive, medical payments, uninsured motorist, etc. Liability-only policies leave you exposed.

Can I Reduce My Premium by Opting for 10/20/10?

Yes, choosing just the minimum mandatory 10/20/10 liability limits is one way to reduce your car insurance premium. However, it means you are vastly underinsured and put your assets at risk.

It’s best to get quotes with higher limits like 100/300/100 before making a decision. The premium difference may be less than you think. Don’t compromise safety just to save some money.

What are the Average Auto Liability Limits?

Per industry data, the average auto liability limits chosen by U.S. drivers are:

  • Bodily injury per person: $132,000
  • Bodily injury per accident: $265,000
  • Property damage per accident: $115,000

Clearly, most people prefer to buy more than the bare minimum 10/20/10 coverage. Make sure you choose adequate limits too.

Can I Split the Limits However I Want?

No, you cannot pick random split limit numbers. Most insurers only offer set combinations to choose from.

For example, offered options may be 50/100/50, 100/300/100, 250/500/100, etc. You have to pick one. Customizing is not possible beyond what is available.

Key Takeaways

  • 10/20/10 defines the split limit liability coverage of $10,000 per person and $20,000 per accident bodily injury, plus $10,000 property damage per accident.

  • It is the minimum liability insurance mandated in some states.

  • 10/20/10 offers low protection. Carrying higher limits is recommended if possible.

  • Along with liability, also buy coverage like collision, comprehensive, uninsured motorist, etc. for complete protection.

  • Compare quotes with different liability limit options before choosing what to buy.

In conclusion, understanding what 10/20/10 liability insurance means is useful when deciding the right auto policy for your needs and budget. Make sure you are adequately covered.

10/20 What insurance numbers mean


What does 10 20 10 mean in insurance?

Depending on the state, it may be as low as $10,000 per person and $20,000 per accident for bodily injuries, and $10,000 for property damage—that’s typically shown as 10/20/10 when you’re shopping around for a policy.

What do the numbers mean in insurance?

Liability coverage limits for different types of vehicles are typically represented by three numbers, e.g. 25/50/25. These numbers represent how much you’re covered for bodily injury per person ($25,000), bodily injury per accident ($50,000), and property damage per accident ($25,000).

What does a 20 40 10 insurance policy indicates that the bodily injury per person limit is?

For example, 20/40/10 means coverage up to $40,000 for all persons injured in an accident, subject to a limit of $20,000 for one individual, and $10,000 coverage for property damage.

What does 25 50 20 mean in insurance?

Split limits, like 25/50/25, are how your liability coverage breaks down. The first number is your bodily injury liability coverage per person, the second number is your bodily injury liability coverage per accident, and the third number is your property damage liability coverage per accident.

Leave a Comment