What do the numbers on my car insurance mean?
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UPDATED: Oct 15, 2021
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- The numbers located on your declaration page refer to the limits on your insurance policy
- Each state mandates a minimum amount of insurance that each driver must carry
- If your car insurance limits are lower than your state’s insurance requirements, you will want to find a new policy by entering your information into a car insurance comparison tool
When you get into a car accident, your insurance coverage covers the damages up to a certain amount.
The cap to the amount is called a policy limit, and it is denoted by a set of three numbers on the declarations page of your auto insurance policy information pamphlet.
30/50/25: What do those numbers mean?
When you look at your declarations page, you will see three numbers. For example, your declarations page may state 30/50/20. Those numbers are the maximum payout amounts for certain types of damage in accordance with your auto liability insurance. Liability insurance is made up of bodily injury liability and property damage liability coverage.
- Bodily injury liability coverage for one person – If one person in the other car is injured, your insurance company will pay up to $30,000 for their medical care.
- Bodily injury for more than one person – If there are two or more people injured in the other car, your insurance company will pay out a maximum of $50,000 for all of the combined medical bills.
- Property damage liability coverage – The last number is the maximum amount that your insurance company will pay to remedy damage you caused to another person’s property while driving your vehicle. In the example, the maximum amount would be $25,000.
When you purchase a car insurance policy, you can usually stipulate the maximum coverage amounts as long as they do not go below your state’s minimum limits required by law.
However, it is important to understand that buying a minimum insurance policy may leave you underinsured. Health insurance companies don’t always pay out on the medical costs associated with a car accident, so you could end up paying a lot of money out of pocket if you have low bodily injury liability limits.
To find a policy that provides you with adequate coverage amounts at a price you can afford, you can use a comparison tool.
Enter your ZIP code below to compare car insurance company rates.
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What additional types of coverage might be on your auto policy?
Some states mandate additional coverages, including uninsured and underinsured coverage. This amount typically corresponds to the last number on your insurance policy, but it may be stated elsewhere on your declarations page.
- Underinsured motorist coverage – The underinsured section of your car insurance, if you have it, pays the remainder of your accident-related expenses if the other driver does not have enough coverage to cover all of the expenses.
- Uninsured motorist coverage – The uninsured section of your car insurance pays your accident-related expenses if the other driver does not have car insurance.
If you do not have uninsured or underinsured motorists coverage, it may be in your best interest to locate a policy with those types of coverages by using a comparison tool.
The Insurance Information Institute estimates that 12 percent of drivers across the US are uninsured.
You may also wish to add collision coverage and comprehensive coverage to your insurance policy. Collision coverage pays for damages to your vehicle and person that occur as a result of an at-fault accident. Comprehensive pays for damages to your vehicle caused by natural disasters, falling tree limbs, vandalism, and other incidents that don’t involve an accident.
Adding these coverages to your policy will increase your auto insurance premium, but it’s important to make sure your financial assets are adequately protected.
What do you do if you need to raise your policy limits?
If you look at your declarations page and feel that your coverage limits are too low, you can quickly and easily find an affordable insurance policy with higher limits by taking advantage of an auto insurance comparison tool.
The insurance industry is complex and there are a lot of companies out there. Car insurance comparison tools contain a regularly updated database of all the car insurance policies in your area.
When you enter your information and click the submit button, the tool quickly finds all of the policies in your local area that match your criteria.
This allows you to quickly sift through the information and premium amounts to find a policy that you can afford and provides you with adequate car insurance coverage.
If your current auto insurance company does not provide what you need at a reasonable price, it’s time to shop around.