What does Auto Liability Limits mean?

Definition of Liability Limits

The definition of Auto “Liability Limits” is the maximum amount which a liability insurance company agrees to pay as a result of a single accident or injury to a single person, but what does that actually mean? When dealing with insurance it’s always full of industry jargon that can be very difficult to understand. You might see numbers that look like 30/60/25. What’s that all about? Let’s break it down.

When you’re shopping for auto insurance you’ll have different requirements by your state imposed upon you for what is the minimal amount of auto insurance you can carry. For some states it’s simply liability insurance. For other states there are more strict requirements. Select your state for Auto Insurance here:

What does Auto Liability Insurance do?

Let’s start with an example – What if you accidentally ran a stop sign and hit another car? That other car is damaged now. What if someone in that car was injured? Who pays for their medical bills? When you have Auto Liability Insurance – your policy will pay those fees for damages if it is determined that you hurt someone or damaged someone’s property in an auto accident. However – there are limits set in your policy that you must be aware of.

What are Liability Limits?

NOTE: Every policy can be different so be sure to check with your auto insurance agency today to fully understand the details.

When reviewing your auto insurance policy you might see numbers like 30/60/25. These are the details that speak to the amount of money that will be paid upon a claim for Bodily Injury. The most this policy will pay is $30,000 per person up to $60,000 per accident. If an injured person has medical fees up to $25,000 — your insurance will pay that amount.

What about Property Damage claims?
Look through your auto insurance policy. Find a number that has a PD after it – something like this 100PD. This means that you have $100,000 in Property Damage coverage. Remember back to our example of accidentally running a stop sign and hitting a car? That car must either be replaced now or restored from the damages. This policy will cover up to $100,000. Many states only require a minimum of 25PD. That’s $25,000 – keep in mind that a lot of cars these days cost more than that so you may want to speak to our representatives to find what’s best for you.

How do you find out what your Auto Liability Limits are?

Let us help. Connect with our team today to review your policy.