With Liability limits of 25/50/10 it means you are covered for those that you may cause injury or damage to for up to $25,000 per person for bodily injuries and $50,000 for all bodily injuries resulting from one incident or occurrence. The third indicator of $10,000 is your limit for the property damage you caused others. So 25/50/10 is your Bodily Injury Liability and Property Damage Liability limits.

With these limits the most each injured person could get from your policy is $25,000, so if 2 people were injured and awarded $35,000 each than your car insurance policy would be short $10,000 each person. It is typically not indicated as awarded, but rather what is needed to cover their medical expenses. Your insurance policy will only pay up to your BI limit of $25,000 per person so with 2 people getting $10,000 over your per person BI limits you would be personally liable for $20,000 while your insurance company would pay out the total BI limit of $50,000.

This is why it is important to up your Liability limits if you can so that you have high enough limits that they will not likely be exceeded. When your Liability limits are exceeded it leaves you and your assets at risk since you will now be personally responsible for the amounts awarded to people over your car insurance limits. As an agent, I have 250/500/100 limits.

If you have a house, car, boat and other assets that you want to protect you can obtain what is called umbrella coverage. Insurance providers offer umbrella coverage so you can increase your protection beyond the limits of your policy.

For an umbrella policy you list what items you want covered (i.e. home, boat, cars, motorcycle, etc) and then those listed items are underwritten and a rate is given for the premium to cover up to $1 million in liability.

Some companies only offer umbrella policies if you insure both your home and car with them. We have partnered with Safeco to help you find the best rate for Umbrella insurance.

Safeco's Personal Umbrella policies are competitively priced and offer exceptional coverage. You can receive coverage up to $2 million. Umbrella policies are available to Safeco customers who insure their personal autos with Safeco. You may have to have certain liability limits in order to qualify for Umbrella insurance (availability is subject to state laws, compliance and underwriting).

See our article The Basics of a Personal Liability Umbrella Policy for more information on this subject.