Hi. I don’t know if theres anybody that works in insurance here but i’m new to insurance and for some reason Im having trouble understanding what the liability limits mean like the 25/50/25. Can somebody really explain it like i’m 5? thanks. Im in Indiana by the way if this helps.
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Liability insurance coverage amounts are typically represented by three numbers, such as 25/50/25, which means:
* Bodily injury per person: $25,000
* Bodily injury per accident: $50,000
* Property damage per accident: $25,000
For auto insurance, those refer to the limits, the maximum amount that your insurance will pay. In order, these would mean:
$25,000 Bodily Injury per Person – if someone gets hurt in an accident that you’re at fault for, your insurance will pay them up to $25,000
$50,000 Bodily Injury Per Accident – if *multiple* people are hurt in an accident that you’re at fault for, your insurance will pay up to $50,000 split between them
$25,000 Property Damage Per Accident – if you cause any property damage, up to $25,000 will be paid to the owner of that property, whether it’s a car, house, fire hydrant, whatever
The thing to remember here is that if you cause more damage than your insurance will cover, *you* will be liable for it. If you break someone’s leg badly and they need $80,000 worth of medical care, your insurance will pay them $25,000, and they might sue you for the other $65,000. So the numbers you have here (25/50/25) I believe are the minimums in Indiana that you have to carry by law, but it might be worth seeing what it costs to bump up those limits, depending on your situation.
This first 25 means the insurer will pay up to $25,000 to any one person you injure in an accident. The $50,000 in the middle means the insurer will pay up to that amount for ALL people injured together. The last $25,000 is the most the insurer will pay for property damage in an accident.
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