Liability limits: why 25/50/25 is usually not enough
State minimums were set decades ago. One hospital stay clears them, and the balance is yours.
Every state sets a minimum liability requirement, usually written as three numbers — bodily injury per person, bodily injury per accident, property damage. It's tempting to read the minimum as "enough," since it's what the law requires. It's rarely enough to cover a serious accident.
What the numbers actually mean
A common minimum format like 25/50/25 means $25,000 per injured person, capped at $50,000 total per accident, and $25,000 for property damage. A single hospital stay after a serious collision can exceed the per-person limit on its own — and once your policy limit is exhausted, the remaining balance is the at-fault driver's personal responsibility, not the insurer's.
Why raising limits rarely costs much
Liability coverage is one of the cheaper components of a policy to raise, because the odds of a catastrophic claim are low even though the cost of one is high — exactly the kind of risk insurance is built for. Moving from a state minimum to 100/300/100 typically adds a modest amount to the premium relative to the exposure it removes.
When to consider an umbrella policy
Once your auto liability limits are maxed out, a personal umbrella policy extends further liability protection across your auto and home coverage together, often at a lower marginal cost than raising auto limits alone. It's worth asking about once your net worth exceeds what your auto policy alone would cover in a worst-case claim.
This guide is general information, not insurance advice, and does not account for your state's specific regulations. Figures cited are industry estimates from published rate studies. VIP Car Insurance is a free comparison service and is not an insurer.