AUTO INSURANCE: 250/500 vs. 500/500 Auto Insurance Coverage in California: What’s the Difference and Why It Matters
When choosing an auto insurance policy in California, one of the key decisions you’ll make is your liability coverage limits—how much your insurance will pay if you cause an accident that injures someone else. If you’ve seen numbers like 250/500 or 500/500, you might wonder what they mean and how they impact your financial protection.
Breaking Down Liability Coverage Limits
Auto insurance liability coverage is typically expressed as three numbers (e.g., 250/500/100). The first two numbers refer to bodily injury liability, while the third refers to property damage liability (which we won’t focus on in this post).
Here’s how 250/500 and 500/500 coverage compare:
250/500 Coverage
$250,000 per person for bodily injury
$500,000 per accident (the total amount available for all injured parties combined)
500/500 Coverage
$500,000 per person for bodily injury
$500,000 per accident (same total for all injured parties combined)
The difference? With 500/500 coverage, each injured person can receive up to $500,000, whereas with 250/500 coverage, the per-person limit is capped at $250,000—even if the accident costs more.
Why Does This Matter?
In California, medical costs and legal settlements can be expensive, especially in serious accidents. Here’s why choosing higher coverage might be worth it:
Better Financial Protection
If you cause an accident and one person has medical bills exceeding $250,000, your 250/500 policy won’t fully cover it, and you may be personally responsible for the remaining costs.
With 500/500 coverage, you have double the protection per person, reducing the risk of out-of-pocket expenses.
Lawsuits & Legal Risks
If medical bills, lost wages, and pain and suffering claims exceed your policy limits, you could face a lawsuit.
Higher coverage means less risk of being sued for personal assets, like your home or savings.
Peace of Mind
Accidents are unpredictable, and having more coverage ensures you’re protected even in severe cases.
If you drive frequently, have teenage drivers in the household, or own significant assets, 500/500 coverage can provide extra security.
Is 500/500 Coverage Worth It?
While 500/500 coverage is more expensive, it’s often worth considering if:
You have significant personal assets to protect
You want to avoid lawsuits and financial liability in a severe accident
You drive in high-risk areas with heavy traffic or highways
If budget is a concern, consider balancing higher liability limits with deductible adjustments or bundling policies for discounts.
Final Thoughts
Choosing between 250/500 and 500/500 coverage depends on your financial situation, risk tolerance, and need for peace of mind. If you can afford it, 500/500 coverage offers superior protection and reduces the risk of personal financial loss in a serious accident.
Need help reviewing your policy? CST Insurance Services is here to help you choose the best coverage for your needs. Contact us today for a personalized review!
