What Does 100/300 Bodily Injury Liability Mean?
Demystify 100/300 bodily injury liability. Grasp how these auto insurance limits protect your finances when others are injured in an accident.
Auto insurance policies often present coverage amounts as a series of numbers, which can initially appear complex. These numerical sequences represent the financial limits of different types of coverage within a policy. Understanding these figures is important for comprehending the extent of protection an insurance policy provides in the event of an accident. Each number signifies a specific maximum payout for particular scenarios.
Understanding the 100/300 Numbers
The numbers “100/300” refer to specific limits within a bodily injury liability insurance policy, expressed in thousands of dollars. The first number, “100,” signifies a maximum payout of $100,000 for bodily injuries sustained by any one person in an accident for which the policyholder is at fault; this individual limit applies to each injured party. The second number, “300,” indicates a total maximum payout of $300,000 for all bodily injuries sustained by all parties in a single accident. These limits represent the highest amounts the insurance company will pay. If total damages exceed these policy limits, the at-fault individual may be personally responsible for remaining costs.
What Bodily Injury Liability Covers
Bodily injury liability insurance helps cover costs for other individuals injured in an accident where the policyholder is deemed at fault. This coverage addresses expenses such as medical bills and lost wages if injured individuals are unable to work due to their injuries. Bodily injury liability may also cover legal fees incurred by the policyholder if a lawsuit arises from the accident. It can also contribute to funeral costs if the accident results in fatalities for others. This coverage is designed for third parties, meaning those outside of the policyholder and their immediate household.
What 100/300 Does Not Cover
While 100/300 bodily injury liability has specific limitations, it does not cover injuries sustained by the policyholder or passengers in their own vehicle. Other types of coverage like personal injury protection (PIP) or medical payments typically address these. It also does not cover damage to the policyholder’s own vehicle, which collision coverage addresses. This liability does not cover damage to other people’s property, which falls under property damage liability. Bodily injury liability is intended for accidental injuries caused to others and generally excludes intentional acts or punitive damages.
How 100/300 Limits Work
The application of 100/300 bodily injury limits can be illustrated through a hypothetical accident scenario. Suppose a policyholder with 100/300 coverage causes an accident involving three other individuals.
If one person sustains $75,000 in injuries, another $120,000, and a third $50,000, the “per person” limit of $100,000 would apply first. The insurance would pay $75,000 for the first person and $100,000 for the second person, meeting the per-person cap. For the third person, the policy would pay $50,000.
The total payout for all three individuals would be $75,000 + $100,000 + $50,000, equaling $225,000. Since this total is below the “per accident” limit of $300,000, the insurer would cover the full $225,000.
If the second person’s injuries were $150,000, the policy would still only pay $100,000 for that individual due to the per-person limit. If the total injuries for multiple people exceeded $300,000, the policy would cap its payout at $300,000, and the policyholder would be responsible for any remaining amount.