Understanding Auto Insurance Limits

The auto insurance limits you choose determine how much Plymouth Rock will pay in the event of a loss covered under your policy. Intuitively, the higher they are, the more expensive your policy will cost. However, the risk of carrying lower limits is that you will be responsible for higher out-of-pocket costs in the event of an accident.

How to Choose Your Car Insurance Limits

Balancing risk and the cost of your policy is a personal decision and should be based on your unique needs. You should consider the value of your assets, the amount you are comfortable spending on your car insurance policy, the amount you are comfortable spending in the event of a loss, and more. Fortunately, you do not have to make decisions about your limits alone. Expert advice is available from your agent or from licensed professionals at Plymouth Rock.

What Are Auto Insurance Liability Coverage Limit Options?

When people refer to auto insurance liability coverage limits, there are generally three numbers to think about:

  • Bodily Injury Liability Coverage Per Person: If you are legally responsible for an accident, this coverage pays for legal defense costs and for the injuries or death of others. As the name suggests, a single person will be paid no more than this limit by the insurance company.
  • Bodily Injury Liability Coverage Per Accident: Same as above, but this limit defines the total amount the insurance company will pay to all persons (excluding the insured driver) combined in a given accident.
  • Property Damage Liability Coverage Per Accident: This coverage pays for legal defense costs and any damage you have caused to others’ property if you are legally responsible for an accident.

These numbers are sometimes expressed in shorthand following the format of “100/300/50.” In this example, the limits are $100,000 for bodily injury per person, $300,000 for bodily injury per accident, and $50,000 for property damage. You may also see the third number chopped off in some cases (“100/300”). Please keep in mind that you have the option to add additional liability coverage on top of your car insurance limits by purchasing umbrella insurance.

Combined Single Limit (CSL)

An alternative to the per person/per accident limits is the CSL. This option defines one single maximum that would be paid out for both bodily injury and property damage if you are legally responsible for an accident. For example, if you were involved in an accident where you were responsible for bodily injury and property damage, the maximum payout would be $300,000, with no “per person” sublimits nor sublimits for bodily injury and/or property damage.

Because the CSL carries fewer restrictions, it is typically a more expensive option. Again, your best bet for determining the best options for you is to speak with your agent or a licensed professional from our company. We’re happy to help!

Remember that the cheapest coverage is not always the best and that it is important to have it. You can also learn information about what to do if your car floods and more about the car insurance quote process.

Call 855-993-4470, get your free quote online, or find an agent to learn more about car insurance limits in New Jersey. If you need additional information it can be found on our Contact Us page.