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What do the three numbers on auto insurance mean?

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Here's what you need to know...
  • The three numbers on car insurance indicate limits of coverage
  • The numbers represent Bodily Injury per Person/Bodily Injury per Occurrence/Property Damage per Occurrence
  • Three zeroes should be added to each number to reflect the correct amount of coverage
  • These coverages are always on a per occurrence basis

The content of an automobile insurance policy is very similar for all auto owners insured by the same company. Some policies may have endorsements that delete or add coverage, but even with endorsements, the language is the same.

The policy declarations page identifies the insureds, their vehicles, and their coverages.

Policyholders often ask what the three numbers on the declarations page mean. The three numbers are formatted in the following manner, 100/300/100 or 25/50/20.

What they represent is important to those protected by the policy. When shopping for insurance, make sure that quotes being compared are for the same coverages and the same limits.

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Where Three Numbers Are Used

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The three numbers will be found with only certain types of coverage on an automobile insurance policy. The coverages where the three numbers will be seen are:

  • Liability
  • Uninsured Motorist
  • Underinsured Motorist

But what exactly do the numbers mean?

What the Three Numbers Mean

Each of the three numbers indicates how much coverage is available for bodily injury claims and property damage claims with the first two numbers applying to bodily injury and the last number to property damage.

The best way to explain this is through the use of examples.

Applying the Numbers to Liability, Uninsured, and Underinsured Coverages

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Let’s consider liability coverage which helps protect the financial assets of those insured under the policy.

If a policy indicates the amount of coverage for liability is 250/500/50, that means that for anyone bodily injury claim, the most a single injured person can receive regardless of what the claim is worth will be $250,000.

The second number indicates the maximum paid for all bodily injury claims.

If three people each have $250,000 claims, the most the policy will pay is $500,000 with no one getting more than $250,000. The last number represents the maximum that will be paid for all property damage sustained by others.

With uninsured motorist coverage or underinsured motorist coverage, the same logic applies. These coverages are designed to protect financial assets.

However, uninsured or underinsured coverage is designed to protect the insured’s financial assets from those that do not have liability insurance (UM) or those whose limits of coverage are not sufficient (UIM) to pay resulting damages.

If a policyholder has UM limits of 100/300/50 and is struck by an uninsured motorist, the UM benefit will provide up to $100,000 of bodily injury coverage for anyone person insured under the policy with no more than $300,000 applying to all bodily injury claims. All property damage claims are limited to a total of $50,000.

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The individual states mandate the minimum limits of liability coverage. Many people will buy only minimum limits coverage. In many cases, this will not be enough coverage and underinsured coverage will come into play.

If the minimum limits in a state are 25/50/20 and an auto owner with minimum limits causes an accident with severe injuries, it’s likely the minimum limits will not be sufficient to compensate injured parties in full.

With UIM limits in place, there will be additional protection once the minimum limits of the at-fault party have been exhausted.

The Property Damage amount is typically the smallest amount.

Bodily Injury claims compensate for pain and suffering. There is no pain and suffering to be experienced by a vehicle so the need for an extremely high Property Damage limit is sometimes not seen.

Policyholders should be careful of this reasoning when shopping for and comparing insurance rates.

The increasing cost of vehicles and the possibility of accidents involving multiple vehicles may result in a Property Damage limit that is insufficient to protect the financial assets at stake.

Per Occurrence Coverage

Finally, it is important to know that the limits indicated by the three numbers are on a per occurrence basis.

If you have an accident on Monday and then again on Friday, each accident will be covered for the full amount of coverage as indicated by the three numbers. The three numbers are not as confusing as they might seem.

The first number represents bodily injury per person, the second number represents bodily injury per occurrence, and the last number represents property damage per occurrence.

By adding three zeroes to the end of each number, policyholders will have the amount of their coverage.

By understanding how the numbers work, auto owners can compare policy quotes and make sure they have purchased enough insurance to protect those they are liable to and protect themselves when others don’t have insurance or enough insurance.

Comparison shopping is easy. Enter your zip code into our FREE tool!

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