What Do the Numbers 50/100/50 Mean in Regards to Auto Insurance Coverage Limits?

When shopping for car insurance, you’ll often see references to numbers like “50/100/50” when it comes to liability coverage limits. But what do these numbers actually mean and how do they impact your policy?

Let’s take a closer look at what 50/100/50 liability limits represent, how this standard split limit structure works, and why it’s important to understand your coverage amounts.

What Does 50/100/50 Mean for Auto Insurance?

The series of three numbers you’ll see for liability limits on car insurance (like 50/100/50) represents:

• Per person bodily injury coverage
• Per accident bodily injury coverage
• Property damage coverage

Here’s what each specific number in a 50/100/50 policy means:

• 50 – This is the amount of bodily injury coverage per person, up to $50,000. This covers injuries to any one person in an accident you cause.

• 100 – This is the total maximum amount for all bodily injuries per accident, up to $100,000. This covers all parties injured in a single accident.

• 50 – This is the maximum amount covered for property damage in an accident, up to $50,000. This applies to damage you cause to other’s vehicles or property.

For example, in an accident you cause where two people are injured and you damage three vehicles, here is how the limits apply:

• The first injured person could receive up to $50,000 for their medical bills, lost wages, pain and suffering, etc.

• The second person could also get up to $50,000 for their injuries.

• However, the max for all injuries combined is capped at $100,000.

• For the property damage to the three vehicles you hit, your policy would cover up to $50,000 total.

So in this scenario, your auto insurer’s maximum payout under a 50/100/50 policy would be $150,000 total – $100,000 for injuries plus $50,000 for property damage.

How Split Liability Limits Work

The 50/100/50 structure is referred to as “split limits” since it splits the coverage into per person, per accident, and property damage amounts.

Here are some key things to know about how split liability limits work:

• The per person limit sets the maximum payout for injuries to any one individual in an accident. This protects the insurer from large losses tied to just one claimant.

• The per accident limit sets the total cap on injury claims per incident, no matter how many cars or people are involved.

• The property damage limit caps the maximum payment for damage to vehicles and property in the accident.

• If claims exceed any of the set limits, the policyholder would be personally responsible for those costs.

• Insurers offer different liability limit options (100/300/100, 250/500/250, etc.) for more coverage.

• Higher limits mean higher premiums, but more protection from large claims.

Why Auto Liability Limits Are Important

Understanding your liability coverage limits is important because they dictate how much protection you actually have. Skimping on liability limits to save money on premiums can expose you to major financial risk in the event of an at-fault accident.

Here are some key reasons to pay attention to your auto liability coverage amounts:

• State minimums may be very low, like 15/30/5. This provides limited protection.

• Medical costs for even minor injuries can exceed $50,000 quickly nowadays.

• Newer cars or luxury vehicles can cost over $50,000 to repair.

• Lawsuits following an accident can result in legal and court fees well above basic limits.

• Your assets can be put at risk if you are sued for more than your liability coverage.

• Experts recommend buying limits that match or exceed your net worth.

How Much Auto Liability Coverage Should You Have?

There are a few guidelines on how much liability coverage you should consider for optimal financial protection:

• Carry at least the minimum limits required by your state. These vary but can be as low as 15/30/5.

• Match your liability coverage to your net worth as a minimum recommended level.

• Purchase umbrella insurance on top of your liability policy limits for added protection.

• Buy 250/500/250 or higher limits if you have significant assets to protect.

• Increase limits if you drive newer cars, have teenage drivers, or commute long distances.

Some common liability limit options to consider beyond bare minimums are:

• 50/100/50
• 100/300/100
• 250/500/250
• 500/500/500

Liability insurance is crucial in safeguarding your finances and assets after an at-fault accident. Don’t just accept state minimums without reviewing how much coverage you actually need for your situation. Discuss your limits with an insurance agent to make an informed decision on protection.

Can Limits Be Different for Bodily Injury vs. Property Damage?

It’s possible to have different liability limits for bodily injury coverage vs. property damage coverage. For example, you could have:

• $100,000 per person / $300,000 per accident bodily injury
• $50,000 property damage

This 100/300/50 split would provide higher injury protection but the state minimum property damage coverage.

Some common splits like this are:

• 100/300/50
• 250/500/100
• 300/300/100

Mixing and matching BI and PD limits allows you to fine-tune coverage for more protection where you want it. The key is not skimping on property damage, since even minor accidents nowadays can easily exceed $50,000 in vehicle repairs.

Can I Buy Higher Limits Than Typical 50/100/50 or 100/300/100 Policies?

Yes, most insurers will offer liability limits that go higher than the common 50/100/50 or 100/300/100 benchmarks. Possible options usually up to $500,000 or even $1 million limits.

Higher limits to consider based on your financial exposure:

• 250/500/250
• 500/500/500
• 500/1 million/500
• 1 million/1 million/1 million

However, raising your limits significantly will increase your insurance premiums. An umbrella policy can provide higher coverage for less than bumping up your liability limits dramatically.

Umbrella policies start around $200 per year for $1 million in extra coverage. This adds an affordable layer above liability policy limits.

How Much More Does Higher Liability Coverage Cost?

The cost increase to raise your liability insurance limits can vary greatly depending on factors like:

• Your current coverage amounts
• How much higher you increase limits
• Your car model year, safety ratings
• Your driving record and accident history
• Your age, credit score and other demographics

For example, bumping limits from 50/100/50 to 100/300/100 may cost an extra $150+ per year on average. But going from 100/300/100 up to 250/500/250 could increase premiums by $300 or more annually.

Get quotes from insurers to see proposed rate changes when requesting higher liability limits. The protection benefits will generally outweigh moderate premium increases.

Do I Also Need an Umbrella Policy for More Coverage?

Many insurance experts strongly recommend adding an umbrella liability policy on top of your existing auto and home insurance for better protection. Here are some of the benefits of getting an umbrella:

• Provides an extra layer of coverage above your liability limits.

• Kicks in when your limits are exceeded after an at-fault accident.

• Typically adds $1 million to $5 million in extra coverage relatively cheaply.

• Covers liability claims from auto, home, watercraft and more under one policy.

• Starts around $150 to $300 per year for $1 million in coverage.

• Worthwhile investment to shield assets and net worth.

So while you can increase liability limits, a personal umbrella policy is still recommended for the most robust asset protection. The two strategies work very well together.

How Can I Evaluate Appropriate Limits and Get a Quote?

Here are some tips on finding the right liability limits and getting quotes:

• Carefully consider your assets, income and net worth you need to protect.

• Research state-required minimum limits as a baseline.

• Discuss appropriate limit options with your insurance agent or company.

• Get quotes for higher limits to compare costs.

• Seriously consider adding umbrella insurance on top.

• Ask about any multi-policy or safe driver discounts to offset costs.

• Consider buying higher limits now even if they stretch your budget.

• Review limits at each renewal as your financial exposure changes.

With a little time invested upfront to understand coverages, you can obtain liability limits and umbrella protection that truly meets your needs and keeps your assets safe. Don’t just settle for minimums without analyzing proper limits.