Understanding Limits on Your Car Insurance Policy

Many people don't know what the limits on their car insurance policy mean. As a consumer this is a big mistake, because when you are paying for car insurance you should understand every part of what you are paying for. Limits can be confusing, but this article will explain how the limits on your car insurance policy affect you.

You will often see the limits on your insurance policy written as three numbers with slashes. For example, you might see 200/300/100, this would mean you have $200,000 per person for bodily injury, $300,000 per accident for bodily injury, and $100,000 per accident for property damage.

The first two numbers are the limit on the bodily injury. This would be the highest amount your insurance will pay if you get in an accident where you are at fault and someone is injured. The first number is the per person limit that the car insurance company will pay. The second number is the maximum amount they will pay for personal injuries to all people in the accident. Most people recommend that these limits are $100,000 & $300,000, as most medical costs are the same throughout the country.

The third number is the amount that the insurance will pay per accident for property damage. This is if you get into an accident where you damage another car or you damage someone's house or other personal property. A lot of people say a limit of $100,000 is a good limit for property damage, but for this number consider the area you live in. If you drive a lot in a very expensive area you could easily cause more than $100,000 in property damage if you damage a person's house.

Knowing the limits on your car insurance policy is important. If you have any questions regarding your limits on your car insurance policy, be sure to ask your insurance agent.