What Is 100/300 Insurance?
Last Updated on December 20, 2020
Many insurance experts recommend buying 100/300 insurance. But what is 100/300 car insurance?
When you have 100/300 car insurance, you have $100,000 of bodily injury liability coverage per person and $300,000 of bodily injury liability coverage per accident. These are higher requirements than any state, and it gives drivers extra protection after causing an accident.
Today, we’re explaining everything you need to know about 100/300 insurance, including how much it costs and whether or not it’s the right choice for you.
How 100/300 Insurance Works
A 100/300 car insurance policy comes with $100,000 of bodily injury liability coverage per person and $300,000 of bodily injury liability coverage per accident.
These plans can also be expressed as 100/300/100 plans, with the third number referring to property damage liability coverage.
A standard car insurance policy consists of two things, including:
Most states require you to have a specific amount of each coverage. California, for example, requires drivers to have $15,000 of bodily injury liability coverage per person, $30,000 of bodily injury liability coverage per accident, and $5,000 of property damage liability coverage.
Car insurance companies express these numbers as 15/30/5, with each number corresponding to a different type of required car insurance:
- 15: $15,000 of bodily injury liability coverage per person. Each person involved in an accident can claim up to $15,000 of medical bills, lost wages, and other expenses for an accident you caused.
- 30: $30,000 of bodily injury liability coverage per accident. People involved in an accident can claim a total of $30,000 of medical bills, lost wages, and other expenses. The insurance company cannot pay more than $30,000 to cover these damages in an accident.
- 5: The final number, 5, refers to the $5,000 of property damage liability coverage. Property damage liability coverage covers vehicle repair expenses and similar costs. It covers the cost of making any property you damage ‘whole’ again after an accident.
Together, these three numbers make up the core of an auto insurance policy.
With a 100/300 policy, the person is referring to the first two numbers: the bodily injury liability coverage per person and per accident.
What’s Included with 100/300 Coverage?
A 100/300 auto insurance policy includes $100,000 of bodily injury liability coverage per person and $300,000 of bodily injury liability coverage per accident.
If you cause an accident, then anyone injured in the accident can claim up to $100,000 in medical bills, lost wages, and emotional pain and suffering from the accident.
Similarly, the insurer will pay up to $300,000 for the entire accident, including for all people injured in the accident. The insurer will not exceed this number, although you may need to pay additional expenses out of pocket.
With a 100/300 policy, the final number (property damage liability coverage) is not listed. It’s less important than bodily injury liability coverage. Someone might have hundreds of thousands of dollars of medical bills after an accident, and most vehicles aren’t worth anywhere close to that amount.
In other words, here’s what you get with a 100/300 auto insurance policy:
- 100: Drivers have $100,000 of bodily injury liability coverage per person.
- 300: Drivers have $300,000 of bodily injury liability coverage per accident.
Do I Need a 100/300 Policy?
Most states require car insurance liability limits of around 15/30, or $15,000 of coverage per person and $30,000 of coverage per accident. Some states have 25/50 requirements or 30/60 requirements.
However, it’s not always in your best interest to meet the minimum insurance requirements in your state. This is the bare minimum amount of car insurance required. It provides basic protection and lets you legally drive, but you may want to exceed these requirements.
That’s why many insurance experts recommend a 100/300 policy.
With a 100/300 policy, you get higher liability insurance limits. Instead of meeting minimum insurance requirements in your state, you’re exceeding requirements.
Why Insurance Liability Limits Are Important
Insurance liability limits are important. In fact, insurance liability limits could be the difference between bankruptcy and a safe financial future.
Let’s say you rear-end a minivan at a stoplight. The minivan is filled with a family of five people. Each family member requires $25,000 of medical treatment, which includes ongoing physical therapy costs, emergency treatment, and other expenses.
If you have a bare minimum 25/50 car insurance policy, as required by your state, then you’re underinsured in this situation. Your insurance covers the medical bills of two passengers, and then your policy is exhausted.
After your policy is exhausted, your insurance company has reached its payment limits. The insurer agreed to cover a maximum of $25,000 of damage per passenger and $50,000 per accident. After covering the medical bills of two passengers, the insurer has reached its limit.
However, there are still three passengers who have medical bills. Because you caused the accident, you are liable for any damages resulting from the accident. That means you need to pay $75,000 out of pocket.
If you had a 100/300 policy, then you would not have to pay $75,000 out of pocket. Your insurance would cover each passenger, and the total coverage is less than the total liability coverage. Your insurer pays the full $125,000 owed to the passengers in the minivan, and you don’t pay anything out of pocket.
Increase Coverage If You Have Assets Worth Protecting
If you don’t have many assets, then you may not need to buy a 100/300 policy. After an accident, you can simply declare bankruptcy.
Most people, however, do have assets worth protecting. They don’t want to declare bankruptcy. They have a house, vehicles, bank accounts, and other assets that could be seized in a lawsuit.
That’s why many people opt for 100/300 coverage. 100/300 coverage gives you significantly more protection over the bare minimum required in your state. It could be the difference between bankruptcy after an accident – or a smooth financial future.
Other drivers opt for umbrella liability insurance, which adds $1 million or more of liability insurance.
How Much Car Insurance Do You Need?
Your insurance needs are different from another driver’s insurance needs. While some drivers require $5 million of umbrella liability coverage, other drivers only need basic liability coverage.
Consider your financial needs and situation before buying car insurance. Or, talk to an insurance expert.
Some drivers may need a 100/300/100 policy for adequate protection.
Other drivers may want to increase coverage to 250/500/100 for added protection.
As with all insurance, it’s up to you to determine the best limits based on your unique needs and situation.
Final Word on 100/300 Insurance
100/300 insurance is a car insurance policy with $100,000 of bodily injury liability coverage per person and $300,000 of bodily injury liability coverage per accident.
Some car insurance companies advertise 100/300 plans for added protection. A 100/300 plan exceeds the minimum insurance requirements in every state, giving you added protection over a plan that simply meets the bare minimum insurance requirements.
Compare quotes online today to find the best 100/300/100 or 100/300 plan for your unique auto insurance needs.
