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# Comparing Coverage Limits Between Two Car Insurance Policies

A customer shopping car insurance policies between two insurance companies might wonder how to go about comparing coverage limits. Making the comparison between multiple car insurance quotes can be confusing, especially when different coverage limits are being cited at different premium costs. The secret to understanding coverage limits between car insurance policies is easy and requires only simple computation. First, the customer needs to understand how to read a car insurance quote. Coverage limits in car insurance usually pertain to two types of insurance: Property Damage and Bodily Injury Liability.

Property Damage Liability pays for damage which the driver of your vehicle causes as the result of a collision. Typically, Property Damage Liability will be quoted as a straight coverage limit such as \$50,000 or \$100,000. This figure is the maximum that your policy will pay for property damage which is the result of an accident.

Bodily Injury Liability pays for the injuries or death which the driver of your vehicle causes to another party. Bodily Injury Liability will be quoted as two dollar figures which are separated by a slash such as \$10,000 / \$20,000 or \$50,000 / \$100,000. The first number refers to the coverage limit per individual; the second number refers to the coverage limit per accident.

Comparing the coverage limits between car insurance policies is simple and easy. Suppose you have two quotes for Property Damage Liability with different coverage limits:

Quote #1:

\$50,000 for a premium of \$100

Quote #2

\$75,000 for a premium of \$145

Simply divide the coverage limit by the premium amount.

#1: \$100 / \$50,000 = 0 .02 cents per \$ of coverage

#2: \$145 / \$75,000 = 0.00193 cents per \$ of coverage

Based upon this calculation, Quote #2 is the better deal.

To compare two quotes for Bodily Injury Liability with different coverage limits:

Quote #1

\$25,000 / \$50,000 for \$95

Quote #2

\$40,000 / \$80,000 for \$102

The second number is of primary concern since it is the maximum coverage limit amount. Divide the coverage limit by the premium amount.

#1: \$95 / \$50,000 = 0 .0019 cents per \$ of coverage

#2: \$102 / \$80,000 = 0.001275 cents per \$ of coverage

Based upon this calculation, Quote #1 is the better deal.

Although this method of calculation allows the comparison of different coverage limits between car insurance policies, the customer should bear in mind that it is not all encompassing. There is no comparison of the risks associated with choosing a lower limit. It does not take into consideration the possibility that a coverage limit could be exceeded, which could result in the customer's personal assets being threatened.

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