Insurance is one of those things people often set and forget. You buy a policy, meet the minimum requirements, and move on with your life. But as your assets grow, inflation rises, and legal landscapes shift, those once-sufficient coverage limits may no longer protect you adequately. One common auto insurance coverage structure is 50/100, which stands for:
- $50,000 in bodily injury liability per person
- $100,000 in bodily injury liability per accident
While this meets many states’ minimum requirements, is it enough in today’s world? Let’s explore when and why you should consider increasing your limits.
Healthcare expenses have skyrocketed over the past decade. A single car accident involving serious injuries can easily exceed $50,000 per person—especially with emergency care, surgeries, and long-term rehabilitation. If multiple people are injured in an accident, $100,000 may not cover all medical bills, leaving you exposed to lawsuits.
Juries today award higher settlements than ever before. If you’re found at fault in an accident, you could be on the hook for:
- Medical bills
- Lost wages
- Pain and suffering
- Punitive damages
A $100,000 per accident limit might not cut it if multiple claimants are involved.
If you own a home, have savings, or other valuable assets, a lawsuit could put them at risk. If your insurance doesn’t cover the full claim, plaintiffs can go after your personal wealth. Increasing your limits helps shield your financial future.
If you’ve recently:
- Bought a more expensive car
- Purchased a home
- Increased your savings or investments
…then your old 50/100 policy may no longer align with your financial exposure.
Certain factors increase your likelihood of being in an accident or facing higher claims:
- Urban areas with heavy traffic (more accidents)
- States with high medical costs (e.g., California, New York)
- Areas with aggressive litigation trends
If any of these apply, higher limits (e.g., 100/300 or 250/500) may be wise.
Young drivers are statistically more likely to be involved in accidents. If your child is now driving, increasing your liability limits can prevent financial disaster in case of a major collision.
If you use your car for:
- Business commutes
- Delivery services (Uber Eats, DoorDash)
- Ride-sharing (Uber, Lyft)
…your personal auto policy may not fully cover commercial-related accidents. Higher limits (or a commercial policy) may be necessary.
While 50/100 is the minimum in many states, financial experts often recommend:
- 100/300 ($100,000 per person / $300,000 per accident)
- 250/500 ($250,000 per person / $500,000 per accident)
For high-net-worth individuals, umbrella insurance (an extra $1M+ in liability coverage) is also worth considering.
Higher limits mean slightly higher premiums, but the cost difference is often minimal compared to the financial risk of being underinsured. Shopping around can help you find the best rates.
Imagine causing a crash that injures three people:
- Person A: $60,000 in medical bills
- Person B: $40,000 in medical bills
- Person C: $30,000 in medical bills
Total: $130,000 in claims
Your coverage: $100,000 per accident
Result: You pay $30,000 out of pocket
A victim suffers a spinal injury requiring:
- $150,000 in immediate medical treatment
- $50,000/year in ongoing care
Your $50,000 per person limit is exhausted immediately, leaving you liable for the rest.
Insurance isn’t just about meeting legal requirements—it’s about safeguarding your future. If you’re still at 50/100, now might be the time to rethink your limits.
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Author: Car insurance officer
Source: Car insurance officer
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