Do you look at the Bodily Injury to Others split liability limits on your personal and commercial automobile insurance policies that read 100,000 per person/300,000 per accident and wonder what that means or think you have $300,000 in bodily injury? If so you aren't the only one but are incorrect. Let me explain why.
I need to emphasize that the "per person" in Bodily Injury split liability limits coverage is very important because it is that phrase that explains the coverage. What these Bodily Injury split liability limits are saying is that if you are in an accident and cause bodily injury someone in the other vehicle, that injured person will receive $100,000 per injured person. If you have caused bodily injury to only one person, he or she will have $100,000 bodily injury money and that is it. If they only need $80,000 they only get the $80,000. But, if they need $120,000 they will only get $100,000.
What happens when you have two people that you have caused bodily injury to and the same split liability limit of 100/300? One person needs $80,000 and the other needs $120,000. The one injured, let's call them injured A, for $80,000 will get the full $80,000 for his or her injuries. The other injured person, injured B, who needs $120,000 will only get $100,000 because you only have coverage for $100,000 PER PERSON.
It doesnt matter that Injured A didnt use $20,000 of his or her $100,000, it will not roll over because each $100,000 is per person and if they dont need it, no one gets it. So that leaves you, the insured, responsible for the remaining $20,000.
So, what the heck is the $300,000 for? Well, it is per accident so the most that the policy will pay out is $300,000 – Injured A: up to $100,000, Injured B: up to $100,000 and an Injured C: up to $100,000 = $300,000.
A = 100,000
B = 100,000
C = 100,000
You, as an insured, need to hope there is no injured D because there is no money left for him or her.
This is why we agents try to get you to buy higher Bodily Injury split liability limits. Most people purchase insurance believing that this portion of the policy will never be used and we as agents hope that it is never used. But that one person who has had to use it and didnt have enough will tell you they would have paid more money to have higher Bodily Injury coverage if they had known what they know now after a claim. Like all insurance, you never appreciate it until you need to use it.
What do we suggest? 250/500 Bodily Injury split liability limits with a personal umbrella policy OR on a commercial auto 1 million combined single limit and a commercial umbrella policy.