Question: What does 10/20/10 mean or 25/50/25 mean?
Answer: Numbers such as 10/20/10 or 25/50/25 represent liability insurance limits for a car insurance policy.
Let's examine 25/50/25 since these are common limits for car insurance.
The first number --25-- stands for $25,000 and the maximum coverage for bodily injury liability for one person injured in an accident. The second number -- 50 -- stands for $50,000 and the maximum coverage for bodily injury liability for one accident. The third number -- 25 --stands for $25,000 and the maximum coverage for property damage liability for one accident.
Looking at the lower limits of 10/20/10, it would break down to bodily injury limits of $10,000 per person and $20,000 per accident and then $10,000 per accident for property damage liability.
The liability portion of your car insurance policy pays for damage to others that you're legally liable for if you're at-fault in a car accident. Bodily injury pays for others that you injure with your vehicle and property damage liability pays for damage to someone else's vehicle or property, such as a fence, mailbox or house.
It's advised that you buy as much liability insurance as you can afford since the more you have the more it protects you from lawsuits. See, if your liability limits are exceeded due to an at-fault accident, then your personal assets are at risk. The person you damaged in an accident can look to you for compensation for any outstanding bills that you're liable for and your car insurance coverage didn't cover due to the limits being reached.
Buying higher limits of liability insurance doesn't have to cost an arm and a leg. In fact, it additional liability can be cheap. To get the best rates on liability coverage, and all other coverages you may place on your car insurance policy, comparison shop with multiple car insurance providers.