What do auto insurance limits really mean?

We’ve all been there, talking to an insurance agent about getting a new auto policy when the dreaded question is asked, “What type of limits would you like to have?”  Most of us don’t know what this means and need it explained, well we’re going to do you a solid and not only explain what limits are, but how different types of limits can benefit you.

First let’s explain what car insurance coverage limits are: They are the maximum amounts of money that your insurance will pay out if you make a claim.

So, let’s say you injure someone and their passengers in an accident. Most states have minimum amounts required for liability insurance. Most often you will see property damage and bodily injury listed as a split limit.

Split limits, while sounding scary, are very easily broken down.

For example the minimum liability that a California driver is required to carry is:  15/30/5.


$15,000 maximum paid out for bodily injury for a single person in an accident you cause.

$30,000 maximum paid out for bodily injury per accident, but no more than $15,000 for a single person in an accident you cause.

$5,000 maximum paid out for damage to the other party’s property.