Understanding 10/20/10 Car Insurance Coverage

10/20/10 is a common configuration for liability insurance limits on auto policies. But what do these numbers mean and how do they impact what you’ll pay – or receive – if an accident occurs? This guide provides an in-depth look at 10/20/10 car insurance, who needs it, and how to determine if you have adequate protection.

What is 10/20/10 Car Insurance Coverage?

10/20/10 refers to:

• $10,000 bodily injury liability per person
• $20,000 bodily injury liability per accident
• $10,000 property damage liability

These limits represent the maximum payouts your insurer will cover if you cause an accident that injures others or damages property.

Let’s break it down further:

Per Person Bodily Injury Liability

If you cause an accident that injures someone else, this covers their medical bills and lost wages up to $10,000 per injured person. It does not cover you, your passengers, or your car.

Per Accident Bodily Injury Liability

This is the total limit for all injuries per accident. Even if 3 people are injured, the maximum payout is still $20,000. If one person’s injuries exceed the $10,000 per person limit, it reduces what’s available for others injured in the same accident.

Property Damage Liability

When you damage someone else’s property in an accident – whether it’s another vehicle, a building, or other assets – this covers repairs up to $10,000. It does not cover damage to your own car.

Without adequate liability insurance, you could be sued personally by accident victims and forced to pay damages that often reach hundreds of thousands of dollars or more.

Who Needs 10/20/10 Car Insurance Coverage?

Most drivers are legally required to carry minimum liability coverage dictated by their state. In Florida, for example, you must have at least:

• $10,000 bodily injury liability per person
• $20,000 bodily injury liability per accident
• $10,000 property damage liability

This aligns with a 10/20/10 policy. But is it enough protection?

Experts recommend carrying more than the minimum liability coverage if possible. Medical and repair costs quickly exceed $10,000 these days. A major accident could easily lead to hundreds of thousands in damages owed by the at-fault driver.

With minimum limits, the injured party can sue you personally for what is not covered by insurance. Your assets and future wages would then be at risk.

Example Scenarios with 10/20/10 Liability Limits

Here are some examples to illustrate how 10/20/10 policies pay out after accidents:

Single injury, expenses below $10K

• You hit another car, injuring the driver who racks up $7,000 in medical bills and lost wages.
• Your liability coverage pays the full $7,000. You owe nothing out of pocket.

Single injury, expenses exceed $10K

• You hit a motorcyclist who suffers severe injuries totaling $100,000 in medical bills.
• Your policy pays $10,000 – its max per person limit.
• The motorcyclist can sue you personally for the remaining $90,000 in uncovered expenses.

Multiple injuries below per accident limit

• You hit another car with 2 occupants.
• One person has injuries and bills totaling $7,000.
• The second person has injuries/bills totaling $4,000.
• Your policy pays the full $11,000 to cover both claims within the $20,000 per accident maximum.

Multiple injuries exceeding per accident limit

• You collide with another vehicle that has 3 occupants.
• Two people have $10,000 each in medical bills.
• The third person has $8,000 in medical bills.
• Your policy pays its $20,000 max for per accident bodily injury.
• But this fully covers the first two people only.
• The third injured person can sue you for their uncovered $8,000 in bills.

As you can see, 10/20/10 policies often fall far short, especially when multiple parties are injured. Explore options to increase your liability limits.

Should I Increase My Liability Limits Beyond 10/20/10?

In a word, yes! Going above your state’s minimum liability requirements provides valuable protection for your finances. Many experts recommend:

• $100,000 bodily injury per person
• $300,000 bodily injury per accident
• $100,000 property damage

This provides much more adequate coverage that reduces the risk of paying uncovered expenses out of pocket. The higher limits would cost more in premiums but deliver peace of mind and significant asset protection.

For even more protection, bumping up to:

• $250,000 bodily injury per person
• $500,000 bodily injury per accident
• $100,000 property damage

is ideal for drivers who want maximum liability coverage.

Work with your insurance agent or company to evaluate the right liability limits based on your assets, risk tolerance, driving record, and budget. Striking the optimal balance between premium costs and sufficient coverage is key.

How Much Does 10/20/10 Cost?

Car insurance rates can vary substantially based on your location, driving history, vehicle type, age, gender and other factors. But in general, you can expect to pay the following range for a 10/20/10 policy:

So most drivers pay total yearly premiums between $500 – $2,500 for basic 10/20/10 liability coverage.

Boosting your limits to 100/300/100 could increase your yearly premium around $400 – $1000 in many cases. But the extra protection is often worth the minimal added cost.

The best way to find the right liability limits at the lowest price is to compare quotes from multiple insurers. An independent agent who works with many companies can help shop for the optimal 10/20/10 or higher policy.

The Takeaway

Liability car insurance is required nearly everywhere to cover harm you may cause in an at-fault accident. A 10/20/10 policy meets minimum requirements in most states. But given the potential for exceedingly high accident damages, securing higher liability limits is wise financial self-protection for those who can afford it. Discuss your options with an agent to make sure you have adequate coverage that fits your budget.