What Is 100/300 Insurance?
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The "100/300" in "100/300 auto insurance" refers to the bodily injury liability limits (in thousands) of an auto insurance policy. The 100 means that the policy will cover up to $100,000 of bodily injury sustained by a single person injured in an accident, and the 300 means that it will cover up to $300,000 total for bodily injury per accident.
Generally, 100/300 will be followed by a third number, such as 50, and together will look like 100/300/50. What the 50 represents is the amount of property damage liability coverage, in thousands, that the insurance policy includes. In this example, the policy will also pay for up to $50,000 for the repair of other people's property.
50/100 vs 100/300 Auto Insurance Limits
Let's take another example. If a policy covered $50,000 of bodily injury sustained by a single person injured in an accident, $100,000 total for bodily injury per accident, and $50,000 for property damage coverage, this would be a 50/100/50 auto insurance policy. That means the difference between our two examples (50/100 vs 100/300 insurance) is the coverage of medical expenses both per person and coverage per accident. 50/100 limit plans will be cheaper than 100/300 because the individual and total bodily injury coverage is lower in the case of auto accident injuries.
Remember, liability coverage compensates other people for their car accident-related damages that someone insured under your policy is responsible for. It doesn't pay for the injuries of anyone covered under your policy, that would be the personal injury protection policy.
Auto insurance policies with limits that are as high as 100/300 are often purchased either voluntarily or because they are required by a finance company.
State laws setting minimum liability limits don't usually require such high limits unless there are special circumstances. The states with the highest liability coverage requirements are Alaska and Maine, which require 50/100/25 auto insurance coverage.
However, there are instances where a state may make you carry 100/300 car insurance. In Florida, drivers who have been convicted of driving under the influence of drugs or alcohol must maintain liability insurance limits of 100/300/50.
A more common reason for purchasing 100/300/50 insurance coverage is the policyholder is leasing a vehicle and the finance company is requiring them to carry the policy limit as part of the lease agreement. Leasing companies require this amount of liability insurance coverage to make sure that you're somewhat protected financially in the event you're found responsible for causing injuries or damages in "their" vehicle.
Consider Higher Limits Voluntarily
Drivers may want to think about getting more insurance protection even when they're not required. Most states don't require much motorist coverage when compared with what an accident could potentially cost. A number of states make drivers carry 25/50 bodily injury limits, which can easily be used up following a serious accident. It's often suggested that drivers carry 100/300/50. You can still find cheap online auto insurance quotes with coverage at this level, and having the extra protection could go a long way.
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About The Author:
Jeremy Biberdorf is an entrepreneur and personal finance writer from Vancouver, Canada. After getting a computer systems technology diploma and working as a web programmer for 12 years, he pivoted his knowledge of the web into writing about his passion for personal finance, Modest Money. The finance blog started as a part-time side-project, but quickly grew it into a major platform staffed with a team of financial expert contributors. See his Linkedin profile.