Auto insurance coverage limits set the maximum amount an insurer may pay for certain covered claims. However, different parts of an auto policy use limits in different ways.
For example, liability, uninsured motorist, underinsured motorist, PIP, and Medical Payments coverage may have stated dollar limits. Collision and comprehensive work differently. Instead, those coverages rely heavily on your deductible and the value of your vehicle.
Therefore, understanding these differences can help you compare policies more accurately. In addition, it can prevent you from choosing weaker protection simply because a quote looks cheaper.
What Is an Auto Insurance Coverage Limit?
A coverage limit is the maximum amount available under a specific part of your policy. However, the limit only applies to eligible covered claims and remains subject to policy terms and state law.
For example, bodily injury liability may include two separate limits. One applies to each injured person, while another applies to everyone injured in the same accident. In addition, property damage liability usually has its own limit.[2]
Maximum available coverage
A policy limit sets the maximum insurance available under a specific coverage.
Your share of certain claims
A deductible is the amount you pay toward an eligible claim. For example, collision and comprehensive often use deductibles.
What you pay for insurance
Your premium is the cost of the policy. Therefore, changes to limits or deductibles can also affect the price.
Your vehicle’s pre-loss value
Actual cash value can play a major role when an insurer settles a total-loss claim.
For example, a $500 collision deductible does not mean you have $500 of collision coverage. Likewise, drivers usually do not select an arbitrary $5,000 collision limit simply because a vehicle is worth $5,000.
Where Are Your Auto Insurance Coverage Limits Listed?
Your policy’s declarations page is usually the best place to start. According to NAIC, this document includes important policy information. For example, it can show your coverage limits, insured vehicles, and policy dates.[2]
Coverage name
First, look for liability, UM/UIM, PIP, Medical Payments, collision, comprehensive, and optional coverages.
Policy limit
Next, check the maximum available protection for coverages that use stated dollar limits.
Deductible
Collision and comprehensive usually list a deductible instead of a liability-style limit.
Vehicle and policy term
Finally, confirm the insured vehicles, effective dates, and other important policy details.
Your declarations page and full policy contain much more information. Therefore, ask your insurer or agent to explain anything that is unclear before changing coverage.
How Bodily Injury and Property Damage Limits Work
Liability insurance can help when you are legally responsible for an accident. For example, it may cover injuries to other people or damage to their property. NAIC identifies bodily injury and property damage as key liability components.[1]
Bodily Injury Liability
This coverage can help pay eligible injury-related losses for other people. However, the applicable policy limits cap the available protection.
Property Damage Liability
This coverage can help pay for damage you cause to another person’s vehicle or other property.
What Does 100/300/100 Car Insurance Mean?
Many liability policies use split limits. For example, 100/300/100 contains three separate limits. GEICO explains the same format in its liability guidance.[4]
| Example | BI Per Person | BI Per Accident | Property Damage |
|---|---|---|---|
| 25/50/25 | $25,000 | $50,000 | $25,000 |
| 50/100/50 | $50,000 | $100,000 | $50,000 |
| 100/300/100 | $100,000 | $300,000 | $100,000 |
| 250/500/100 | $250,000 | $500,000 | $100,000 |
These numbers are examples, not recommendations
Your needs depend on your state, finances, assets, household, and budget. In addition, insurers do not always offer the same limit combinations.
What Happens When a Claim Reaches Your Liability Limits?
Consider a policy with 100/300/100 limits. The following examples are simplified. In each case, assume the claim is covered and the insured driver is legally responsible.
One person has $75,000 in covered injuries
Because the claim stays below $100,000, it fits within the illustrated per-person limit.
One person has $140,000 in covered injuries
The policy has a $100,000 per-person limit. Therefore, $40,000 exceeds that illustrated limit.
Several people have $360,000 in covered injuries
The policy allows up to $300,000 for bodily injury in one accident. As a result, $60,000 exceeds the illustrated accident limit.
You cause $135,000 of covered property damage
Because the property damage limit is $100,000, the remaining $35,000 sits above the illustrated limit.
A policy limit does not erase liability above that amount. Therefore, a settlement or judgment may leave you responsible for part of the difference. However, the final outcome depends on the claim, policy, and applicable law.[7]
Split Limits vs. Combined Single Limit
Separate maximums
Split limits use different caps for bodily injury per person, bodily injury per accident, and property damage.
One liability pool
By contrast, a Combined Single Limit uses one total liability limit for eligible bodily injury and property damage claims.[4]
Neither format is automatically better. Instead, focus on how much protection is available and how the policy applies that protection.
State Minimum Coverage Is Only a Starting Point
States set their own auto insurance requirements. For example, NAIC explains that most states require a minimum level of liability coverage. Some states also require PIP, UM/UIM, or other protection.[3]
However, insurance laws can change. Therefore, this guide does not use a static 50-state minimum-limit table. Instead, verify current requirements with an official state source.
What must I carry?
First, identify the minimum coverage required by your state’s current rules.
How much risk can I absorb?
Next, decide whether the legal minimum gives you enough financial protection.
What do higher limits cost?
Finally, request quotes at several limit levels before choosing.
How Much Liability Coverage Should You Consider?
There is no single correct liability limit for every driver. Instead, Triple-I suggests considering protection above the state minimum when your financial situation calls for it.[7]
Lower premiums can sometimes come from selecting lower liability limits, but the savings should be weighed against the amount of protection available after a major accident. Higher auto insurance coverage limits can provide additional protection for drivers who want more coverage than the minimum required.
Therefore, review several factors before deciding.
Assets and savings
First, consider what could be exposed if a serious claim exceeds your coverage.
Income
In addition, consider your broader financial situation rather than only current savings.
Household drivers
Next, review the risk created by everyone who regularly drives your insured vehicles.
Accident severity
For example, one crash can injure several people or damage several vehicles.
Umbrella requirements
If you carry umbrella insurance, the insurer may require specific underlying auto limits.
Budget
Finally, compare several limit levels before choosing the cheapest policy.
A poor driving record may increase your premium. However, it does not automatically determine how much liability protection you need.
UM/UIM, PIP, and Medical Payments Also Use Limits
Liability is only one part of an auto policy. In addition, several other coverages may have important limits. Their rules vary by state and insurer.[3]
Uninsured Motorist
UM can help after an eligible accident caused by a driver who has no insurance.
Underinsured Motorist
By contrast, UIM can apply when the at-fault driver’s insurance is not enough for an eligible loss.[1]
Personal Injury Protection
PIP can help with eligible medical expenses. In some states, it may also cover lost wages or other benefits.[1]
Medical Payments
MedPay can help with eligible medical costs for you and covered passengers. However, policy limits vary.
State rules can make UM/UIM especially complex because requirements and available options vary across the country. California uninsured motorist coverage demonstrates how state-specific rules can influence what drivers need to consider when selecting protection.
Coverage Limit vs. Deductible vs. Vehicle Value
These terms answer different questions. Therefore, do not use them interchangeably.
| Term | What It Controls | Example | Key Point |
|---|---|---|---|
| Liability limit | Maximum available liability coverage | 100/300/100 | You select from limits offered by the insurer. |
| Collision deductible | Your share of an eligible collision claim | $500 | Higher deductibles often reduce premiums. |
| Comprehensive deductible | Your share of an eligible comprehensive claim | $250 or $500 | It can differ from your collision deductible. |
| Vehicle ACV | Important factor in a total-loss settlement | Pre-loss vehicle value | You do not choose ACV like a liability limit. |
| UM/UIM limit | Maximum applicable UM/UIM protection | Varies | State rules affect available limits. |
| PIP/MedPay limit | Maximum medical-related benefits | Varies | Rules depend on the state and policy. |
Collision Coverage Works Differently From Liability
Collision can help pay for eligible damage to your vehicle after a crash. For example, it may apply when you hit another vehicle or an object.
State law generally does not require collision coverage. However, lenders and leasing companies often require it on financed or leased vehicles.[5]
With collision coverage, you usually choose a deductible. Meanwhile, Progressive explains that the coverage limit is typically tied to the vehicle’s actual cash value.[5]
$10,000 pre-loss value and a $1,000 deductible
Suppose an insurer determines that a totaled vehicle had a pre-loss value of $10,000. If the deductible is $1,000, the simplified payment would be about $9,000.
However, actual settlements can differ. For example, vehicle condition, valuation methods, taxes, fees, policy terms, and state rules can affect the final amount.[5]
How Comprehensive Coverage and Deductibles Work
Comprehensive can help protect your vehicle from certain non-collision losses. For example, covered events can include theft, vandalism, fire, hail, flooding, falling objects, and animal impacts.[6]
Like collision, comprehensive normally uses a deductible. In addition, vehicle value affects a total-loss payment. Progressive explains that eligible comprehensive claims can pay up to the vehicle’s actual cash value, subject to the deductible.[6]
Vehicle stolen
For example, comprehensive can apply to an eligible vehicle theft claim.
Hail, wind, or flood
Similarly, comprehensive can cover eligible weather-related vehicle damage.
Animal impact
In addition, damage from hitting a deer commonly falls under comprehensive.
Intentional damage
Finally, eligible vandalism damage can also fall under comprehensive coverage.
You generally do not choose an arbitrary comprehensive dollar limit
Comprehensive does not normally work like liability coverage. Instead, you usually choose a deductible. Meanwhile, the vehicle’s value plays a key role in a total-loss settlement.[6]
How to Choose Collision and Comprehensive Deductibles
A higher deductible often lowers your premium. However, it also increases the amount you may have to pay after a claim.
Therefore, do not choose a deductible based on premium savings alone.
Less out of pocket after a claim
A lower deductible reduces your share of an eligible claim. However, the premium may be higher.
More out of pocket after a claim
A higher deductible may reduce your premium. Still, make sure you could afford it on short notice.
- First, could I pay this deductible tomorrow if necessary?
- Next, how much premium would I actually save?
- Also, how does the deductible compare with my vehicle’s value?
- Would a smaller claim produce little or no payment?
- Finally, does my lender limit the deductible I can choose?
Your Lender May Require Collision and Comprehensive
State law usually does not require collision or comprehensive coverage. However, a lender or leasing company may require both while it has a financial interest in your vehicle.[1]
Check your contract
First, check whether your lender requires physical-damage coverage or limits your deductible choices.
Loan balance and vehicle value differ
For example, you can owe more on a loan than the vehicle is worth when a total loss occurs.
GAP addresses a different problem
When a vehicle is totaled, GAP insurance coverage may help with certain eligible differences between the insurance settlement and the remaining loan or lease balance, depending on the contract terms and other applicable conditions.[1]
When an Umbrella Policy May Be Useful
An umbrella policy can add another layer of liability protection. In general, it may apply after eligible underlying auto liability coverage reaches its limit.[7]
Auto liability policy
First, your auto policy responds to an eligible liability claim.
Auto limit reached
Next, a severe liability claim may exhaust the available auto coverage.
Umbrella coverage
Finally, an eligible umbrella policy may provide additional liability protection.
Umbrella insurers usually require certain liability limits on underlying policies. Therefore, confirm those requirements before lowering your auto limits.
How to Compare Coverage Limits Across Quotes
NAIC advises consumers to give each insurer the same information when requesting quotes. Similarly, you should keep your coverage selections consistent.[2]
First, match the protection. Then compare the price.
Match bodily injury limits
First, make sure each quote uses the same BI limits.
Match property damage limits
Next, use the same property damage liability amount.
Match UM/UIM
In addition, check the UM/UIM limits and state-specific choices.
Match PIP or MedPay
Where applicable, compare the same medical-related protection.
Match physical-damage deductibles
For example, do not compare a $1,500 deductible directly with a $500 deductible.
Match optional coverage
Also compare rental, roadside, rideshare, and other optional protection.
Use the same drivers and vehicles
Similarly, keep mileage, drivers, VINs, and vehicle use consistent.
Compare the final premium
Finally, compare prices after the coverage is truly equivalent.
Getting the cheapest policy requires comparing similar coverage levels, deductibles, and driver information. Comparing car insurance quotes helps drivers understand how rates can vary between insurers.
When Should You Reconsider Your Coverage Limits?
Your insurance needs can change over time. Therefore, review your declarations page after important financial, household, or vehicle changes.[2]
Physical-damage protection can significantly affect the cost of a policy, especially for drivers choosing collision and comprehensive coverage. Full-coverage car insurance options allow drivers to compare protection levels while considering their budget and vehicle needs.
Common Auto Insurance Coverage Limit Mistakes
Assuming minimum coverage is enough
However, the legal minimum and the protection you want are different questions.
Misreading split limits
For example, 100/300/100 represents three separate limits, not one $500,000 limit.
Choosing limits only by price
As a result, a cheaper policy can leave more financial exposure after a severe accident.
Confusing limits and deductibles
Instead, remember that a deductible is your share of certain claims.
Trying to choose a collision dollar limit
Collision normally works through a deductible and vehicle value.
Treating comprehensive like liability
Likewise, comprehensive centers on a deductible and vehicle value.
Ignoring UM/UIM
Meanwhile, UM/UIM protects against a different risk than liability coverage.
Ignoring PIP or MedPay
In addition, these coverages can provide benefits that differ from health insurance.
Comparing different deductibles
Therefore, match deductibles before comparing premiums.
Assuming collision pays your loan balance
Finally, remember that collision and GAP address different financial risks.
Auto Insurance Coverage Limits: Frequently Asked Questions
Liability Limits and Legal Requirements
What are auto insurance coverage limits?
Coverage limits are the maximum amounts available under certain parts of a policy. For example, liability and UM/UIM may use stated dollar limits.
Where can I find my current coverage limits?
First, check your declarations page. It normally shows your main coverages, limits, vehicles, and policy dates.[2]
What does 100/300/100 mean?
It generally means $100,000 of bodily injury liability per person, $300,000 per accident, and $100,000 of property damage liability per accident.[4]
What happens if a claim exceeds my liability limits?
Your insurer’s payment remains subject to the policy limit. Therefore, you may remain responsible for some losses above that amount.[7]
Should I carry more than the state minimum?
It may be worth comparing higher limits. In particular, consider your assets, income, household, budget, and umbrella requirements.[7]
What is a Combined Single Limit?
A CSL uses one total liability limit instead of separate bodily injury and property damage limits.[4]
Collision, Comprehensive, and Deductibles
Does collision have a limit I choose?
Usually not in the same way as liability. Instead, you generally choose a deductible, while vehicle value affects a total-loss payment.[5]
Does comprehensive have a limit I choose?
Similarly, comprehensive normally uses a deductible and the vehicle’s actual cash value rather than a typical liability-style limit.[6]
What is the difference between a limit and a deductible?
A limit sets the maximum insurance available under a coverage. By contrast, a deductible is the amount you pay toward certain claims.
Should I choose a $500 or $1,000 deductible?
First, compare the premium difference. Then choose an amount you could realistically pay after an unexpected claim.
Are collision and comprehensive required by law?
State law generally does not require them. However, lenders and lessors often require both for financed or leased vehicles.[3]
Does full coverage cover everything?
No. Instead, “full coverage” is an informal term. Policies still contain limits, deductibles, exclusions, and optional coverages.
Loans, GAP, UM/UIM, and Medical Coverage
Does collision pay off my loan after a total loss?
Not necessarily. For example, the vehicle’s value may be lower than your remaining loan balance. GAP can address certain eligible shortfalls.[1]
What limits should I choose for UM/UIM?
Available limits and legal requirements vary by state. Therefore, review the options offered to you and compare them with your liability protection.
Do I need PIP or MedPay if I have health insurance?
Do not assume the coverages are interchangeable. In fact, they can provide different benefits and use different limits or deductibles.[1]
How often should I review my limits?
Review them periodically. In addition, check them after major changes involving your vehicles, household, finances, state, or umbrella coverage.
Choose Limits Based on Protection, Not Price Alone
Auto insurance limits do not work the same way across every coverage. For example, liability may use split limits or a Combined Single Limit. In addition, UM/UIM, PIP, and Medical Payments may use stated limits.
Collision and comprehensive work differently. Instead, deductibles and vehicle value play a larger role.
First, confirm your state’s current requirements. Next, decide how much liability protection you want. Then review UM/UIM and medical-related coverage. Finally, choose physical-damage deductibles you could realistically afford.
When you shop, use the same limits, deductibles, drivers, vehicles, and optional coverages on every quote. Therefore, you can compare the final prices on a much more equal basis.
Compare Coverage Before You Compare Price
A cheaper quote with lower limits or higher deductibles is not the same policy. Therefore, match the protection first.
After comparing coverage levels, drivers can also explore ways to find affordable auto insurance without reducing important protection.
Compare Auto Insurance Quotes CorrectlyReferences
- National Association of Insurance Commissioners. What Does Auto Insurance Cover?. Consumer guidance on liability, collision, comprehensive, UM/UIM, PIP, financed vehicles, and GAP protection. ↩
- National Association of Insurance Commissioners. Consumer Auto Insurance. Guidance on declarations pages, limits, liability, collision, comprehensive, total losses, and quote comparison. ↩
- National Association of Insurance Commissioners. Auto Insurance. Overview of auto insurance requirements and major coverage types. ↩
- GEICO. Liability Car Insurance. Explanation of bodily injury, property damage, split limits, and Combined Single Limits. ↩
- Progressive. Collision vs. Comprehensive Insurance. Information on physical-damage coverage, deductibles, and vehicle value. ↩
- Progressive. Comprehensive Auto Coverage. Information on comprehensive claims, deductibles, and actual cash value. ↩
- Insurance Information Institute (Triple-I). How Much Auto Coverage Do I Need?. Guidance on liability limits, umbrella insurance, collision, comprehensive, and deductibles. ↩