People talk about insurance limits all the time and most of the time no one knows what it means. Attorneys are notorious for this. "My client has a 15/30 policy." Or "The defendant only has a 30/60 policy." What are these limits, why do they matter and, most importantly, who cares?
Insurance policy limits, in a car insurance policy, are crucial. They apply in a few areas. You can have a limit for rental coverage or med pay or bodily injury. The limit is the most the insurance company will pay.
So, for example, my rental limit is $1,200. That means my insurance company will pay up to $1,200 while I am in a rental car if my car is damaged by a covered claim. Some rental limits are listed as "10/$300." That means the insurance company will pay up to a maximum of 10 days or $300, whichever comes first.
In the context of bodily injury (and more importantly, uninsured motorist), limits are stated as two numbers. The first number is the per person limit. The second number is the per accident limit. So, if someone has limits of $15,000/$30,000, what does this mean? It means the insurance company will pay up to $15,000 to any one person and a maximum of $30,000 for any one accident. So if you hit a car with 3 people, the most the insurance company will pay is $30,000, even if each claim is worth $15,000.
Why does this matter? Let's say you own a home and two cars. You have a 15/30 limit. (In shorthand, we do not write out the "$" or the ",000" to designate thousands since we all know that we are talking about money and about thousands of dollars.) You hit a car full of people. Your insurance company is only going to pay out $30,000 as a maximum. If you have assets, someone may sue you to come after your personal assets.
So having the right amount of insurance is important. Having "full coverage" means nothing. You need to know EXACTLY HOW MUCH your limits are. If you own a home, a 100/300 policy is a good starting point. But it is only a starting point. You need to know your limits and you need to make sure your uninsured motorist limits match your bodily injury liability limits.
Limits are an important part of insurance. If you do not know your limits, talk to your agent. If you still do not understand it, call me for a free consultation.