Liability limits, translated: what 100/300/100 actually means
Those three numbers on your policy decide what happens to your savings after a bad accident. Here's the plain-English version.
Ask ten drivers what their liability limits are, and nine will guess. That is not their fault. The industry writes the most important number on your policy as a cryptic fraction and moves on.
The three numbers
Say your policy reads 100/300/100. In order:
- $100,000 bodily injury, per person. The most your carrier pays for one person’s injuries in an accident you cause.
- $300,000 bodily injury, per accident. The cap across everyone injured in that accident, no matter how many people.
- $100,000 property damage. The cap for the stuff you hit: cars, fences, storefronts.
Why the state minimum is a trap
Most states let you drive with limits like 25/50/25. Here is the uncomfortable math: the average new car costs more than $45,000, and one night in a hospital can clear $30,000. If you total a new SUV and injure its driver, minimum limits can be exhausted before the ambulance bill arrives.
What happens to the rest of the bill? It follows you. Wages can be garnished and savings can be claimed. Your liability limit is effectively the deductible on your entire net worth.
How to pick a number
A rough rule that serves most people well: carry enough liability to cover what you own plus a year of income. For many households that lands at 100/300/100 or higher. The premium difference between minimum limits and real limits is usually smaller than people expect, often a few dollars a month.
The Salty take
Cheap insurance that cannot survive one bad night is not cheap. When Salty shops your coverage, it compares carriers at limits that actually protect you, and it will tell you when a “great deal” is only great because it is hollow.