Understanding Liability Limits: A Complete Guide

Liability insurance is your first line of defense against financial catastrophe. When you're found responsible for an accident, these limits determine the maximum amount your insurer will pay for third-party damages or injuries. Most states require a minimum amount of liability coverage, often expressed as a series of three numbers (e.g., 25/50/25). However, these state minimums are rarely enough to protect significant assets in a modern legal landscape. ### What the Numbers Mean - **Bodily Injury Per Person**: The maximum amount paid for one person's medical expenses. - **Bodily Injury Per Accident**: The total cap for medical expenses if multiple people are injured. - **Property Damage**: Coverage for repairs to other vehicles or property you damage. Choosing the right limits isn't just about compliance—it's about asset protection. If you have equity in a home or significant savings, a single lawsuit could exceed basic coverage, leaving your personal assets vulnerable. We typically recommend 100/300/100 as a more secure baseline for most drivers.