- Limitations on car insurance allow policyholders to save money by lowering limits to legal requirements and to secure greater protection by increasing limits. Higher policy limits increase policy costs but can close the financial window of liability caused by unforeseen events, including multiple vehicle collisions and collisions with uninsured motorists.
- The actual financial limits of an insurance policy are expressed in three numbers. This applies to both the liability portion as well as the comprehensive and collision segments. The three numbers, as in $15,000/$30,000/#15,000 (or 15/30/15) represent bodily injury limit per person, the limit per accident and the property damage limit per incident respectively.
- When purchasing or leasing an automobile, drivers are required to maintain a full coverage policy. The limits of the policy must be adequate to cover the full cost of the vehicle in order to protect the finance company's financial collateral.
- While some states allow drivers to pay cash in the event of accidents, a basic liability insurance policy serves the same purpose and is the standard for most states. The minimum limit of basic liability coverage varies from state to state but is designed to cover the minimum average financial loss in a vehicle-to-vehicle collision, which is generally 15/30/15.