Don't forget to share this post!

Most drivers carry auto insurance limits of $50,000 / $100,000 or $100,000 / $300,000 because that’s what was quoted—or because it kept the premium lower.

The problem is simple:

Those limits were designed for a different era.

Vehicle values have increased. Medical costs have increased. Jury verdicts have increased. Distracted driving has increased.

If you own assets, earn income, or plan to build wealth, $250,000 / $500,000 bodily injury liability limits should be your starting point—not your upgrade.

Let’s break down why.

What 250/500 Actually Means

Auto liability limits are typically shown as three numbers:

250 / 500 / 100

If you cause an accident involving multiple injured parties:

Anything above those limits becomes your personal responsibility.

The Real Risk: Lawsuits, Not Repairs

Most people think auto insurance is about fixing cars.

It’s not.

Auto liability coverage is about protecting you from lawsuits.

If you cause a serious accident, you are legally responsible for:

It does not take a catastrophic crash to exceed $100,000 in damages.

What Medical Costs Look Like Today

Consider common injury-related expenses:

Now imagine rear-ending a vehicle with two occupants:

That claim can exceed $250,000 quickly.

If you carry 100/300 limits:

Anything beyond that may be pursued from:

That is the true exposure.

Property Damage Is More Expensive Than Ever

Modern vehicles are no longer simple machines.

They include:

Even moderate collisions involving:

Can exceed $50,000 in damage.

Now add:

A $50,000 property damage limit is often insufficient. Even $100,000 can be tight in certain losses.

The Wealth Protection Perspective

Auto liability limits should reflect your financial situation.

Consider:

Lower liability limits create a mismatch between your exposure and your protection.

Plaintiff attorneys evaluate the financial profile of defendants. If you have assets, you are a more attractive target.

Higher limits create a stronger barrier between a lawsuit and your personal finances.

Lawsuit Severity Is Increasing

Large jury awards are becoming more common.

Contributing factors include:

Even when cases settle before trial, lower policy limits restrict negotiating flexibility.

Higher limits provide:

The Cost Difference Is Often Minimal

Many assume 250/500 limits are dramatically more expensive.

In many cases, the difference between:

May only be $10–$30 per month, depending on driving history and location.

That cost difference is often smaller than:

But the protection difference can be hundreds of thousands of dollars.

This is one of the highest-leverage adjustments available in personal insurance.

Why 250/500 Unlocks Umbrella Coverage

Most umbrella policies require underlying auto limits of:

Without those limits, you may not qualify for a $1 million umbrella policy.

An umbrella policy extends liability protection over:

Carrying lower auto limits may prevent you from building a layered protection strategy.

Real-World Example

Consider this scenario:

You slide through an icy intersection and strike another vehicle carrying a family of three.

Injuries:

Medical total: $195,000
Lost wages and pain & suffering: $150,000
Property damage (new SUV): $55,000

Total claim value: $400,000+

With 100/300 limits:

You face personal exposure.

With 250/500 limits:

The difference determines whether your assets are at risk.

State Minimum Limits Are Not a Recommendation

State minimum limits are simply the lowest legal requirement to drive.

In some states, minimums are:

These limits are outdated relative to modern claim costs.

Being legal does not mean being adequately protected.

When 250/500 May Not Be Enough

For higher-income households or business owners, 250/500 may still be insufficient.

Additional protection may include:

Liability protection should align with:

Common Objections

“I’m a safe driver.”

Most serious accidents are not intentional.
They are caused by:

Safety reduces probability—not severity.

“I don’t have many assets.”

Future income can be subject to garnishment in many states.
Judgments can impact long-term financial growth.

Insurance protects earning power—not just current savings.

“My carrier didn’t suggest it.”

Many quoting systems default to lower limits to keep premiums competitive.
That default does not mean the limit is appropriate.

The Bigger Strategy: Liability Layering

A structured liability approach often includes:

Uninsured/Underinsured Motorist (UM/UIM) coverage is critical. If someone hits you with low limits, your policy protects you.

Liability coverage should be intentional—not accidental.

Final Thoughts

Auto insurance is not just a legal requirement. It is an asset protection strategy.

The difference in premium between 100/300 and 250/500 limits is often modest. The difference in financial protection can be substantial.

In today’s environment—where medical costs, repair costs, and lawsuit severity continue to rise—lower liability limits create unnecessary exposure.

For most responsible adults who:

$250,000 / $500,000 bodily injury liability limits should be the baseline—not the upgrade.

When paired with proper uninsured motorist protection and an umbrella policy, it creates a layered defense aligned with real-world risk.

Insurance is not about expecting the worst.
It is about protecting your future if it happens.

Next Step

We are here to serve truckers through commercial trucking insurance, risk management, and industry support. Want to learn more or work with us? Request a quote or call.

Related Articles