The three numbers in your car insurance policy (called split limits) are the limits of your liability coverage. Each number tells you the coverage limit for a specific portion of your liability insurance, so a 25/50/25 policy means you have bodily injury liability limits of $25,000 per person and $50,000 per accident, and property damage liability limits of $25,000.
Those numbers tell you how much your car insurance company is willing to pay out to the other driver in an at-fault accident, but drivers who want enough protection in the event of an accident should get much higher levels of liability insurance.
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What does 25/50/25 mean on an insurance policy?
Liability insurance covers damage you cause to another person or their property in an at-fault accident. The first two numbers in a liability policy (25/50) represent your bodily injury liability coverage limits. The third number (25) represents your property damage liability coverage limit.
Bodily injury liability coverage
The first two numbers in your 25/50/25 liability insurance are your bodily injury liability coverage limits. The first number is the limit for your bodily injury liability coverage per person, while the second number is the coverage limit for your bodily injury coverage per accident.
In a 25/50/25 liability policy, you would have $25,000 in coverage per person and $50,000 per accident. This means that if you hit someone else on the highway and injure three people, your insurance company will only pay up to $50,000 toward their total medical bills, with a limit of up to $25,000 per person.
Property damage liability coverage
The third number in a 25/50/25 policy represents your property damage liability coverage limit. Property damage liability coverage pays for damage you cause to another person’s property (up to the limits of your policy) in an at-fault accident.
Property damage liability insurance covers damage to other people’s property, which means you are covered if you hit another car on the highway, damage your neighbor’s mailbox, or drive through someone’s retaining wall.
With a 25/50/25 liability policy, you would have up to $25,000 in property damage coverage per accident, which likely won’t be enough to cover damages caused in a serious accident.
Why is 100/300/100 better than 25/50/25?
At-fault drivers are held financially responsible for any and all damages caused in an accident, which means you will be expected to pay out of pocket for any damages not covered by your insurance.
Drivers with 25/50/25 levels of liability insurance who cause $100,000 in bodily injury expenses in an accident will be expected to pay the additional $75,000 out of pocket, even if that means selling your property or having your paycheck garnished.
Choosing higher levels of insurance provides better financial protection in the event of an accident, which is why experts encourage drivers to buy a minimum of 100/300/100 in liability coverage.
What is recommended for car insurance coverage?
Most drivers should purchase full coverage insurance, which just refers to a car insurance policy that includes both liability coverage and coverage to pay for your vehicle in an accident. Drivers who are financing their vehicle may be required to buy a full coverage policy, which usually includes:
Liability coverage: Liability coverage pays for bodily injury and property damage you cause to someone else in an at-fault accident.
Comprehensive coverage: Comprehensive coverage pays for damage to your vehicle caused by something other than a collision, like vandalism, falling objects, fire and explosions, weather-related damage, glass damage, damage caused by an animal, and theft. If you are financing your vehicle you may be required by your lender to have comprehensive coverage, but it isn’t required by law in any state.
Collision coverage: Collision coverage pays for damage to your vehicle in an accident, whether or not you are at fault, like damage caused by an accident with another driver or a collision with a stationary object, like a mailbox or a tree. Collision coverage isn’t required by law, but lenders usually require you to purchase collision coverage if you are financing your vehicle.
Uninsured motorist coverage: Uninsured motorist coverage pays for your medical expenses (up to the limits of your policy) if you are hit by an uninsured or underinsured driver. This coverage only applies to medical expenses; your collision coverage would pay for any damage to your car if you are hit by an uninsured driver. Uninsured motorist coverage is part of your required minimum liability coverage in some states.
Other coverages: There are other types of coverage that may be required in your state, like personal injury protection (PIP) and MedPay, and drivers who have a loan on their vehicle may need to purchase gap coverage. You also might need other types of coverage, like roadside assistance or towing and labor, though these aren’t required in any state.
How much liability insurance do I need?
Almost every state requires drivers to have a minimum amount of liability coverage. If you buy at least the minimum required levels of liability you have enough insurance according to the law, but this often isn’t enough to protect you financially in case of a serious accident.
Policygenius recommends drivers have a minimum of 100/300/100 liability coverage to pay for any serious damage in an at-fault accident. It is very easy to cause a significant amount of damage in an accident.
For example, if you totaled someone’s Jaguar, or worse, caused an accident that sends an injured driver or their passengers to the hospital, you will be responsible for paying those costs. If you have a minimum of 100/300/100 in liability coverage, you will likely have enough insurance to cover any costs associated with the accident.
But there are some situations where setting your liability coverage at 100/300/100 may not be right for you:
You have a lot of assets: If you own a lot of property or other high value items, you should purchase higher levels of coverage, like 250/500/250, to protect yourself financially. Because you are still responsible for any damages above and beyond the limits of your policy,your home and any other assets you have could be at risk after a serious at-fault accident.
You can’t afford it: If 100/300/100 coverage is too expensive, you should buy the highest level of coverage you can afford; for some people, that may be 50/100/50 or 25/50/25 in liability coverage, or even the required state minimum levels of liability insurance. There is no shame in not being able to afford the highest levels of liability coverage, but it is important to buy as much as you can afford to protect yourself in an at-fault accident.
How much does car insurance cost?
Car insurance costs an average of $1,638 for full coverage insurance with 50/100/50 levels of liability, but the cost difference for higher levels of liability coverage is usually smaller than you’d think.
For example, average rates for full coverage with 100/300/100 levels of liability are $1,822 per year, which is only $170 more per year than the same policy with 50/100/50 levels of liability.
25/50/25 levels of coverage are actually pretty low; many states require drivers to buy higher levels of coverage than 25/50/25 to be in compliance with the law.
Here are average rates for full coverage compared to liability only coverage by state:
Average annual cost for liability only
Average annual cost for full coverage (50/100/50)
Policygenius has analyzed car insurance rates provided by Quadrant Information Services for every ZIP code in all 50 states, plus Washington, D.C.
For full coverage policies, the following coverage limits were used:
Bodily injury liability: 50/100
Property damage liability: $50,000
Uninsured/underinsured motorist: 50/100
Comprehensive: $500 deductible
Collision: $500 deductible
In some cases, additional coverages were added where required by the state or insurer.
Rates for overall average rate, rates by ZIP code, and cheapest companies determined using averages for single drivers age 30, 35, and 45. Our sample vehicle was a 2017 Toyota Camry LE driven 10,000 miles per year.
Some carriers may be represented by affiliates or subsidiaries. Rates provided are a sample of insurance costs. Your actual quotes may differ.