A brand-new pickup pulled up to the pump across from me at Casey's last week, the kind with chrome steps and a sticker price you can guess from the shine. I was filling the CR-V and doing math in my head, because I'd spent the night before reading our car insurance policy. If I backed into that truck, would our insurance cover it?
The answer is yes, but only because of three numbers I couldn't have explained a month ago.
What 25/50/25 means
Missouri's minimum liability coverage for car insurance is written as 25/50/25. I'd seen those numbers on every quote I got this spring and never asked what they meant. Here's what I've learned, in plain words. Check your own declarations page, since policies can be written a little differently.
Liability pays for damage and injuries you cause to other people. It doesn't pay for your own car or your own injuries. The three numbers are in thousands of dollars.
The first 25 is $25,000 for injuries to any one person you hurt. The 50 is $50,000 total for injuries to everybody you hurt in the same accident. The last 25 is $25,000 for damage to other people's property, which usually means their car but can also mean a fence, a mailbox or the front of a gas station.
Anything above those limits is your problem. If you cause $40,000 of damage to someone's truck and you have $25,000 of property coverage, the other $15,000 can come after you, your savings and your wages.
Why we carry more
We carry 100/300/100: $100,000 per person, $300,000 per accident and $100,000 for property. We've had those limits since we got married, mostly because Debbie told us the week of the wedding never to carry the minimum. Like most of Debbie's advice, nobody asked for it, she was right, and I didn't understand why until years later.
That truck at Casey's is part of the why. A new pickup can cost $60,000 or more, which is more than double the state minimum for property damage, before you count anything else that got hit.
The bigger reason is medical bills. I work in a pharmacy, so I see what things cost before insurance. An ambulance ride, a few nights in a hospital in Columbia, surgery, physical therapy: one bad crash on US-63 could go past $25,000 for one person before anyone gets discharged.
We're not rich. But we have a house fund that's starting to look real, an emergency fund and two steady paychecks, and that's exactly what a lawyer would look at. The point of the higher limits is that the insurance company pays, and our house fund stays a house fund.
Missouri also requires uninsured motorist coverage, which pays for our own injuries if the driver who hits us has no insurance. Ours matches our liability limits. That one is worth asking your agent about, since it protects you instead of the other driver.
What the higher limits cost us
This was the part I really wanted to know. I asked our agent to price our current policy, both vehicles, with nothing changed except the liability limits.
| Liability limits | Per month, both vehicles |
|---|---|
| 25/50/25 (Missouri minimum) | $108 |
| 50/100/50 | $117 |
| 100/300/100 (what we carry) | $129 |
So going from the minimum to what we have costs $21 a month: $129 minus $108. That's $252 a year. Going from the middle option up to ours is $12 a month, or $144 a year, for twice the per-person and property coverage and triple the per-accident coverage.
I like to think about bills per day. Our higher limits cost about 69 cents a day, which is less than the fountain drink I shouldn't be buying at Casey's anyway.
The price doesn't climb in a straight line, and that surprised me. Quadrupling the per-person limit didn't come close to quadrupling the cost. The way our agent put it, the first dollars of coverage are the ones most likely to get used, so they cost the most, and the extra layers on top are cheaper. The table above backs that up.
A couple of other things I learned along the way. "Full coverage" isn't actually a kind of coverage. It's just what people call liability plus comprehensive and collision, which cover your own car. And there's something called an umbrella policy, which adds another layer of liability on top of your car and home insurance. We're not there yet. When we own a house, I'll ask about it.
If you've never looked at your own three numbers, they're on the first page of your declarations. Ours took me five minutes to find and a month to understand. I'm not going to tell anybody what limits to carry. I'd just ask your agent what one level up would cost. It might be less than you think.
