Auto insurance policy limits define the maximum amount an insurance company will pay for a covered claim. While deductibles determine how much a policyholder pays first, policy limits determine how much financial protection is available when a serious accident, injury, or loss occurs.
Policy limits apply differently depending on coverage type, claim severity, and the number of people or vehicles involved. Many drivers carry limits that meet legal requirements but underestimate how quickly those limits can be exhausted in real-world accidents.
This section explains how auto insurance policy limits work, how they are structured across different coverages, how claims are paid when limits apply, and how to decide whether current limits provide adequate financial protection.
Articles in This Section
- What Auto Insurance Policy Limits Mean
- Bodily Injury Liability Limits Explained
- Property Damage Liability Limits Explained
- Per Person vs Per Accident Limits
- Split Limits vs Combined Single Limits
- State Minimum Auto Insurance Limits Explained
- Why State Minimum Limits Are Often Not Enough
- How Policy Limits Affect Injury Claims
- How Policy Limits Apply in Multi-Vehicle Accidents
- What Happens When Auto Insurance Limits Are Exceeded
- How Policy Limits Affect Lawsuits and Settlements
- Choosing Auto Insurance Limits Based on Income and Assets
- How Policy Limits Work With Uninsured Motorist Coverage
- Underinsured Motorist Limits Explained
- How Policy Limits Apply to Property Damage Claims
- Medical Payments and PIP Limits Explained
- How Umbrella Policies Extend Auto Insurance Limits
- When Higher Auto Insurance Limits Make Sense
- Common Misunderstandings About Policy Limits
- How Often You Should Review Your Auto Insurance Limits
Related Guides