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online texas auto insuranceMany people are confused by the way the liability limits are listed on their policies. Sometimes the limits might be listed in this format, 10/20/30. Another popular method for displaying limits is BI 10/30 PD 20. The confusion related to formatting like this is understandable, and many people have questioned agents about these numbers. However, understanding how auto liability limits work is essential; not having the right amount of coverage can be financially devastating.

Auto Liability Insurance Limits

The liability limits on an auto insurance policy typically covers physical injuries that drivers would be legally liable for. For example, if an individual failed to yield the right of way, and this act led to a collision, the person who failed to yield would be liable for injuries and damage sustained by the other party.

Understanding the Limits of Liability Insurance

When drivers purchase auto insurance policies, these policies have certain coverage limits. If a driver purchases a policy with $10,000 dollars of coverage against bodily injury and $30,000 of coverage for the total accident, these are the largest amounts that will be paid out. If the other party suffers damages that are greater than those limits, the insured party is legally obligated to pay the rest of the amount. The insurance policy would have exhausted its limits. Of course, if there was adequate coverage, the insurance policy would cover the entire amount.

Explaining the Number Formats

If the insurance amount is listed in this manner on a policy, 10/20/30, the first number is the amount reserved for bodily injury. The second amount is reserved for property damage. The last number is the total amount that can be paid out for the entire accident. If the policy lists the numbers as BI 10/30 PD 20, the first number refers to the allowable amount for bodily injuries. The second number refers to the total amount allowed for the accident, and the last number is the amount allowable for property damage.

Obviously, it’s imperative to select the right amount of coverage for auto insurance liability. Many people choose the minimum amounts in an attempt to save a little cash initially. If an accident occurs, this can lead to bigger financial losses later. Betting on the chances that an accident will not occur isn’t a smart move. Accidents are unpredictable and it’s much better to be financially prepared for them than to hope that an accident never happens.

Call Afformic Insurance at 1-888-751-7511 for additional information regarding auto liability insurance coverage or visit our website for instant Texas auto insurance. Let us help you obtain the right amount of coverage for your vehicle.

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