All About 20/40/10 Coverage
If you’ve ever checked out auto insurance policies or tried to figure out the minimum coverage requirements in your state, you’ve probably run into a figure with three sets of numbers separated by a forward slash. It looks like this – 20/40/10 and what you’re seeing is an abbreviated way to express liability amounts in car insurance. Here we’ll go over how to read these figures and what they mean in terms of your auto insurance policy.
How to Read and Understand Limits
If you plan on purchasing auto insurance any time soon, then you should definitely know how to read liability coverage amounts. Here’s a look at how it works:
- The first number you see represents the maximum amount of liability protection for bodily injury for a single person in a single accident.
- The second number is in accordance with the maximum amount of liability protection for bodily injury for all persons in a single accident.
- The third number lists the maximum amount of liability coverage for property damage in a single accident.
In the case that your state requires you to maintain 20/40/10 coverage, you would need to maintain $20,000 in coverage for bodily injury for one person, $40,000 for bodily injury for multiple people, and $10,000 for property damage.
As it turns out, states that require 20/40/10 liability coverage are fairly rare in the United States. Currently, Alabama, Connecticut, Hawaii, Michigan, and West Virginia are the only states that use 20/40/10 as their minimum. Compared to other states, this is actually a slightly smaller amount of protection, as most use the 25/50/10 requirement. It is not the lowest minimum requirement though - some states have amounts as low as 10/20/10. No matter where you live though, if you’re only worried about meeting the minimum requirements, you should be able to get lower rates.
What Happens if I Don’t Maintain the Minimum Coverage?
If for some reason you are unable to maintain the minimum liability levels required in your state, you could find yourself in trouble with the law. Should a police officer discover that you are driving without the proper insurance, you may receive a citation, fine, or have your vehicle impounded. Repeat offenders could even have their license suspended.
Is Liability Coverage Enough?
While maintaining a 20/40/10 policy will keep you legal on the road in some states, it won’t necessarily keep you safe. Talk to any auto insurance expert and they’ll quickly tell you that everyone should have more than just liability protection. All drivers should at least look into collision and comprehensive coverage, no matter what type of vehicle they drive. Not only will it keep you and your vehicle safe in the case of an accident, it provides you with the kind of peace of mind that you really can’t put a price on. Of course, auto insurers can put a price on it - and that price will certainly be more expensive than simple liability protection. However, most people find it well worth the extra cost and there are plenty of other ways to get lower rates, such as by increasing your deductible.