Tuesday, 10 May 2011

Liability Insurance Information 2011

Liability Insurance

What Is the Meaning of Liability Insurance Written in Three Limits?
By Abaigeal Quinn, eHow Contributor updated: July 11, 2010

Automobile liability insurance is required in most of the United States.
Automobile liability insurance covers physical damage to other persons and property when the policyholder is found at-fault for an accident. These limits are referenced in terms such as 25/50/25, leaving some policyholders confused as to the amount of protection actually provided by the insurance company. All three liability limits represent thousands of dollars.

Single-Person Liability Limit
The single person maximum liability limit represents the first of the three numbers presented as coverage limits. This number defines the total dollar amount the insurance company will pay out to any single person on behalf of a policyholder when liable for an accident.

Aggregate Liability Limit
The aggregate limit represents the second number and sets a cap on the total amount of injury protection allowed during a single accident. This amount remains fixed whether one person suffers injuries during the accident or 10. The aggregate amount does not add to the single person liability limit. If one person suffers more than $15,000 worth of physical injuries with limits of 15/30, the policyholder remains responsible for paying for the rest of the damages.

Property Damage Liability
The third number listed refers to the amount of property damage covered when involved in an at-fault accident. This pays for damage to other trucks, trailers and automobiles and damages to structures such as light poles, buildings, signs, fencing and walls.

Identification
Common default limits offered to policyholders are 15/30/10, 25/50/25, 30/60/30, 100/300/100 and 250/500/250. Policyholders can customize these amounts to better suit their needs.

Considerations
Consider opting for a single injury liability limit such as 100/100, which affords the policyholder the aggregate limit whether the accident involves one person or three. This allows a more severely injured party to receive a larger sum of money for medical expenses, if needed.

Liability Insurance