The numbers 25/50/25 in car insurance refer to split liability limits: $25,000 for bodily injury per person, $50,000 for total bodily injury per accident, and $25,000 for property damage per accident, representing the maximum your insurer pays for each part of a covered claim. This is often the minimum coverage required by many states, but it provides limited protection, as costs for serious accidents can quickly exceed these amounts.
The most commonly required liability limits are $25,000/$50,000/$25,000, which mean: $25,000 in bodily injury per person. $50,000 in total bodily injury per accident. $25,000 for property damage per accident.
Each number tells you the coverage limit for a specific portion of your liability insurance, so a 25/50/25 policy means you have bodily injury liability limits of $25,000 per person and $50,000 per accident, and property damage liability limits of $25,000.
In the example $25,000 / $50,000, this limit is $25,000 per person. Per Accident Limit: The second number denotes the maximum total amount the insurance company will pay for all injuries and damages resulting from a single accident. In the example, this limit is $50,000 for the entire accident.
A common policy limit purchased on a standard policy is $50k/$100k/$50k. That means you get $50,000 per person injury liability, $100,000 per accident injury at max, and $50,000 in property damage coverage.
What if the accident wasn't my fault? In the event of an accident caused by another driver, if your insurer is able to make a full recovery of all payments from the other driver's insurance, then you will not lose your No Claim Discount. Check with your insurer to understand how your No Claim Discount is affected.
Full coverage isn't worth it when the annual cost of collision/comprehensive exceeds a significant portion (e.g., 10%) of your car's low market value, you have enough savings to replace or repair it out-of-pocket, or if you have a clear title and don't need it for work/family, while it's still required for leased/financed cars. Key factors include your car's depreciated value, your emergency fund, and your risk tolerance for paying for repairs/replacement yourself.
For owners of multiple vehicles, stacked insurance generally provides better financial protection despite higher premiums. Stacked coverage allows you to combine the UM/UIM limits across all your vehicles, creating a larger pool of coverage for any accident involving uninsured or underinsured drivers.
You should consider dropping full coverage when your car's value is low (maybe 10 times your annual premium), you have a clear title (no loan), and you can afford to pay for repairs or replacement out-of-pocket if needed, especially if you're driving less or have other vehicles. Dropping it saves money but adds risk, so balance your risk tolerance and budget; if you can't afford to replace the car if it's totaled, keep full coverage.
You should contact your insurance company who will make the necessary enquiries in the first instance. Once the enquiries have been completed and they are satisfied that the person does not have insurance, they may advise you to report the matter to the police who may be able to trace the other person.
Comprehensive covers damage to your vehicle from unexpected non-collision incidents like theft, animal damage, falling trees, and weather damage. Collision covers damage to your vehicle that's the result of a collision with another vehicle or object.
If an insured driver hits an uninsured driver, the insured driver's Uninsured Motorist (UM) coverage typically pays for their own damages (medical, lost wages, property) if the uninsured driver was at fault, while the uninsured driver faces penalties like license suspension and fines but can still claim against the insured driver's policy for their losses, though they're personally liable for their own lack of insurance. The insured driver's liability insurance covers the uninsured driver's property damage if the insured driver caused the accident, but the uninsured driver still faces legal consequences for driving uninsured.
Once your car is fully paid off, you're no longer required to carry “full coverage”. You can choose to adjust or remove certain coverages based on your car's value, age, and how much financial risk you're comfortable taking on.
This is a legal waiver of your right to combine UM/UIM limits from multiple vehicles and cannot be reversed after an accident. Rejecting stacking lowers your premium but also significantly reduces your potential financial protection in an accident with an uninsured driver.
How much liability insurance do I need? Probably more than you think. Generally, we recommend $50,000/$100,000/$50,000 and for people who own a home the recommended amount is $100,000/$300,000/$100,000. Below are some rates for an insurance policy with liability limits set at 100/300/100.
It's financially smart to keep car insurance that includes comprehensive and collision coverages on vehicles that are younger than a decade. The cost of insuring a 5-year-old car equates to 27% of the car's value. After 10 years, the annual cost of car insurance represents 35% of a typical car's value.
The "50% Rule" in insurance primarily refers to a Federal Emergency Management Agency (FEMA) regulation for flood-prone areas, stating that if repairs or improvements to a damaged structure exceed 50% of its pre-damaged market value, the entire building must be brought into full compliance with current flood elevation and construction codes. This rule, also known as the Substantial Damage/Improvement (SD/SD) rule, prevents properties from remaining in high-risk zones without mitigation, potentially affecting flood insurance eligibility if not followed.