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Demystifying Your Car Insurance Policy: What Do Those Numbers Mean?

Nick Peters State Farm

Your stop for auto, home, life and business insurance. Protecting Your Tomorrow, Today - SFGwinnett.com

发布日期: 2023年6月4日

You’ve just received your car insurance policy and find yourself staring at a document filled with numbers and terms that might as well be hieroglyphics. Don't panic! We're here to break it down for you.

What's In The Numbers?

Let's start with the numbers you'll often see in a policy like 100/300/50. What do these mean?

1. The first number ($100,000 in this example) represents the maximum amount your insurance will pay for bodily injury per person in an accident you're found liable for.

2. The second number ($300,000) is the total amount your insurer will pay for bodily injury per accident.

3. The third number ($50,000) refers to the total payout for property damage per accident.

Now, let's take a hypothetical scenario. Suppose you accidentally run a red light, hitting another car with two people inside and causing damage to a nearby fence. If the total cost of the bodily injuries and property damage doesn't exceed $100,000 per person, $300,000 total, and $50,000 for property damage, your insurance policy should cover it.

However, if the costs go beyond these limits, you'd have to pay out of pocket. This is why choosing the lowest limit might not be the best idea. A significant accident could easily surpass these limits, leaving you with hefty bills.

It's Not Just About Price

You might be tempted to choose the cheapest policy to save some money, but remember: car insurance isn’t just a piece of paper; it’s financial protection. Insurers can lower their prices by stripping down coverage, offering the bare minimum required by law. Sure, you might save a few dollars on your premium, but you stand to lose much more if you're involved in a serious accident.

When shopping for car insurance, it’s crucial to consider more than just price. You should also look at:

Uninsured/Underinsured Motorist Coverage: This protects you if you’re in an accident with a driver who doesn’t have insurance or whose insurance can't cover all the costs.
Comprehensive and Collision Coverage: These cover damage to your vehicle from accidents, theft, vandalism, and natural disasters.
Medical Payments/Personal Injury Protection (PIP): This covers your and your passengers' medical expenses after an accident, regardless of who's at fault.

Remember, the goal is to secure comprehensive protection that fits within your budget. That super cheap policy might sound appealing, but it could end up costing you more in the long run.

When it comes to car insurance, it’s better to be safe than sorry. Don’t let those alluring low rates fool you. Invest in coverage that adequately protects you and gives you peace of mind on the road.