What Does 100/300 Mean in Car Insurance?

When I first bought insurance for my car at around age 20, I got some quotes and kept noticing weird descriptors added when the quotes showed my liability coverage options. For example, one insurer offered me 25/50 coverage, another one offered me 50/100, and yet another gave me a quote for 100/300 coverage.

It took some research to figure out that 100/300 refers to bodily injury liability coverage limits, and I don't think I'm alone in not understanding these numbers. Many people don't fully understand how auto insurance works.

The good news is that once you get a simple explanation of what 100/300 means in car insurance, you'll know exactly how to pick the policy that's right for you.

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What does 100/300 mean in car insurance policies?

While there are different types of car insurance available to you, liability insurance is often the most important. This policy will pay for damage you cause to others if you're at fault for an accident. The numbers associated with liability insurance refer to the policy limits, both per person and per accident.

For example, if you bought a 100/300 policy, you would be purchasing:

$100,000 per person hurt in an accident that you cause
$300,000 per incident in total compensation for all victims when you cause an accident

There's usually a third number tacked onto the end as well. For example, your liability coverage limits might equal 100/300/100. That third number is the coverage limit for the property damage you cause to others.

So, say you caused a serious car accident that injured three people. If each person suffered $100,000 in damages and you had 100/300 coverage, then your insurer would fully pay for everyone. Each victim would receive the maximum of $100,000, and your insurer would pay out the full $300,000 for the accident.

But what if you were in a collision that involved two other people, each of whom suffered $200,000 in damages? Your insurer wouldn't fully pay for either since each person could collect only $100,000 maximum. So, even though you have $300,000 in total coverage per accident, the insurer would only pay a maximum of $200,000 because of the per-person limits.

Bodily injury liability coverage

In most states, liability insurance is a legal requirement, and there are minimum coverage requirements. While these limits vary widely by state, some of the most common minimum limits for bodily injury liability include:

15/30
20/40
25/50
30/60
50/100

States require you to buy this coverage because they want to make sure that if you hurt others, you'll have a way to pay for damages.

In the majority of states, called "at-fault" states, if you cause any kind of crash — regardless of the severity — the affected victims can file a claim against your policy. Your bodily injury liability coverage would pay for their losses up to policy limits.

Twelve states are classified as "no-fault" states. In those, you usually must buy a kind of coverage called personal injury protection (PIP). PIP covers the insured driver's losses in a crash, no matter who is at fault. However, even in these states, victims may be able to make a claim against the at-fault driver's liability insurance in serious crashes.

Bodily injury liability coverage doesn't pay for losses to the policyholder, only for the harm to others. So, your insurance won't pay for your medical bills, but it will pay for:

Accident-related medical bills for crash victims
Lost wages for crash victims who can't work due to their injuries
Pain, suffering, and emotional distress that the crash victims experience
Certain wrongful death damages if the crash is a fatal one
Funeral expenses for victims
Your legal fees if the victims sue you

Remember, though, that the insurer only pays up to policy limits, no matter how great the loss. That's why the best liability car insurance policies often include more than the minimum required coverage. If you exceed your liability limits, you become responsible for paying for the rest of the losses out of pocket.

Property damage liability coverage

Property damage liability coverage is also usually required and has a separate limit from bodily injury liability insurance. The limit varies by state and typically ranges from $10,000 to $25,000 per accident.

Like bodily injury liability insurance, this coverage doesn't pay for damage to your property; it only pays if you damage someone else's stuff. Some of the things it might cover include:

Costs to repair or replace someone else's vehicle that you damaged in a crash
Damage to other types of property, such as if you jumped a curb and crashed into someone's house or garden wall

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Why you need sufficient coverage limits

When you're shopping for insurance, there's a critical question to ask: How much car insurance do I need? If you buy too little car insurance, your assets are at risk.

Say you have $100,000 per person in bodily injury liability coverage and cause a crash that results in a victim suffering $300,000 in losses. The victim could collect $100,000 from your insurer and sue you for the $200,000 difference. If you can't pay out of pocket, you could face a judgment against you and potential collections activities such as wage garnishment.

You don't want to put your assets at risk by buying too little coverage, and the minimum required amount in your state is probably too low to provide meaningful protection. As a result, many people buy more than the minimum coverage required.

How to choose your liability coverage limits

Here's what you should do when deciding on liability coverage limits.

Check your state's laws: Make sure you meet the minimum coverage requirements where you live. For example, in South Dakota, you'd need a minimum of $25,000 per person and $50,000 per accident in bodily injury liability coverage and $25,000 per accident in property damage coverage. In Michigan, you'd need $50,000 per person and $100,000 per accident in bodily injury liability and $10,000 in property damage coverage.
Review the advice of experts: For example, finance guru Dave Ramsey suggests getting $500,000 per person in liability coverage in most situations.
Consider your assets: The more money you have and the higher your income is, the more you have to lose. You're also more likely to face a lawsuit after an incident because the victims will assume you have deeper pockets and can pay large damages. Try to get enough coverage to fully protect the wealth you're building.
Assess your risk tolerance: If you don't like taking any risks, you may want to err on the side of buying more coverage. After all, buying too little protection exposes you to the huge risk of having to use personal funds to compensate a crash victim.
Review your driving history: If you simply are not a great driver and are more likely to get into accidents in the future, buying better coverage makes good sense.

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How much does 100/300 car insurance cost?

The cost of 100/300 car insurance varies based on many factors, including your driving history, where you live, what kind of vehicle you have, your gender and marital status, and many other things.

You should always shop around to compare options to see which company provides the very best coverage at a fair price. Don't just choose the cheapest company, though. Review customer reviews and make sure the company has a good customer service reputation.

According to Insurance.com, it costs $158 per month and $1,895 per year on average for a full coverage policy that includes 100/300/100 liability insurance limits. You can check the table below to see how much the average annual cost varies across some major insurers.

Insurance company	Full coverage (100/300/100)
Allstate	$2,509
Farmers	$2,387
GEICO	$1,763
Nationwide	$1,548
Progressive	$1,998
State Farm	$1,975
Travelers	$1,587

Source: Insurance.com

Other types of recommended coverage

Liability coverage is just one important type of auto insurance. Other coverages that you may want to purchase to protect your assets include:

Uninsured/underinsured motorist coverage: Some states require this or mandate you opt out in writing. It pays for your losses if you or someone you love is hurt by a driver who leaves the scene or has either no insurance or too little coverage to pay for your damages.
Comprehensive coverage: This pays for non-crash-related losses, including minor incidents like windshield repairs after a chip and major incidents like your car being stolen and not recovered. Your lender or leasing company usually will require it.
Collision coverage: This pays for your losses if you get into a collision and no one else is at fault from whom you can recover. For example, it may apply if you hit a guardrail. This is another coverage that lenders and leasing companies usually require.
Personal injury protection: Some states require PIP. It pays for medical bills and lost wages for those whose injuries don't rise to a level of seriousness required by state law to pursue a claim against an at-fault driver.
Guaranteed asset protection (GAP) insurance: GAP coverage pays for any remaining balance on your auto loan or lease if your vehicle is totaled or stolen. Your insurer only pays out the fair market value in those situations, so you may owe more than your car is worth.

Not everyone will need all types of coverage, but make sure to not only meet any state minimums but also get the full amount of coverage to protect your assets. If you lease or finance your car, check with the lender or leasing company about additional coverage requirements.

FAQs

Is 100/300 a good amount of coverage?

A bodily injury liability policy that provides coverage of $100,000 per person and $300,000 per incident is reasonably good. It's above the minimum auto insurance requirements in all states.

However, if you aren't a great driver, you have a lot of assets to protect, or you have a low risk tolerance, you may want to buy more than this amount since your insurer won't cover more than your policy limits.

Is 100/300 coverage required?

Currently, no state has a minimum 100/300 liability coverage requirement. However, you may still want to get this amount of coverage to make sure you protect your assets and don't have to pay a large bill out of pocket if you cause property damage or injure someone in a crash.

What is the liability coverage displayed as 100/300/50?

The liability coverage displayed as 100/300/50 means:

Your insurance would cover up to $100,000 in bodily injury damages for each person you hurt in an accident.
Your insurance would cover up to $300,000 total per accident in bodily injury damages for the victims you hurt in an accident.
Your insurance would cover up to $50,000 in property damage you cause to others.

You can purchase more coverage than this if you want broader protection.

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Bottom line

A 100/300 car insurance policy provides more bodily injury liability protection than the state minimum and might be enough to protect your assets. Just think carefully about what level of risk you want to transfer to the insurer versus take on yourself.

Once you have decided on your desired liability coverage amount, shop around to find an insurer offering you that protection at a fair price so you can follow the rules and take an important step to protect your assets in case the worst occurs.

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