you've worked hard to earn enough money topurchase your car and are buying insurance to protect your investment. after all, youcan't afford to pay for a big accident out of your own pocket. but how do you know howmuch insurance you need? the amount of insurance you purchase is usually called your policylimit, or limit of coverage. it's the maximum amount your insurance company will pay fora particular loss, or losses, while your insurance policy is in effect. your policy may includea variety of limits, so we'll take a look at the main kinds. first, let's look at liabilityinsurance. if you are found legally responsible for harm to someone else or their property,you will have to pay for the damages you caused. liability insurance can help with that. inan auto policy, the portion that pays for
harm to another person is called bodily injury.you will likely see a set of two numbers for that coverage limit -- something like 250/500.the first number is the amount that the insurance company will pay per person in an accident.the second number is the total amount that the company will pay for an accident, regardlessof how many people are involved. the numbers are in thousands so if your policy shows 250/500,it means $250,000 per person, $500,000 total. a separate coverage applies if you cause damageto someone else's vehicle or property. suppose you have an accident and your vehicle damagesnot only the other party's vehicle but a fence alongside the road. coverage for this is referredto as property damage. you'll see a different limit for that on your policy. it's usuallyone number, and it is the total your insurance
company will pay for all property damagedas the result of any one accident. sometimes, insurance companies will put all three ofthese numbers together. if you see 250/500/100, it means your limits are $250,000 per personfor bodily injury, $500,000 total per accident for bodily injury, and $100,000 total forproperty damage per accident. so what about protecting your property? an auto insurancepolicy can include coverage for damage to your car by purchasing comprehensive and collisioncoverage. rather than a pre-determined limit, a loss to your vehicle is settled based onits current value. even when simplified, understanding your insurance policies is easier said thandone. that's where your independent agent comes in! they are there to answer your questionsand help you understand which coverages and
limits you need to protect you and your family.to help you make the right choices, be sure to contact your local independent agent today!
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