Understanding Split Limit Auto Liability—and Why Being Underinsured Can Cost You More Than You Think
By Overbay Insurance Services | Waynesville, NC
Auto insurance can sometimes feel like it’s written in another language. At Overbay Insurance Services, we believe in making coverage simple and understandable—so you can make informed decisions that protect your financial future.
One of the most important (and most misunderstood) components of your auto policy is liability coverage, particularly how it’s structured with split limits. Let’s break down what split limit auto liability means and why carrying too little coverage could leave you dangerously exposed.
What Is Split Limit Auto Liability?
In North Carolina—and most other states—your auto liability insurance is typically written with split limits, which look something like this:
50/100/50 (**REMEMBER: North Carolina state minimum limits increase to this, effective 07/01/2025)
These three numbers represent thousands of dollars, and they dictate the maximum your insurer will pay out for bodily injury and property damage when you’re at fault in an accident:
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50 – Maximum the insurer will pay for bodily injury per person
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100 – Maximum the insurer will pay for total bodily injury per accident (regardless of how many people are injured)
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50 – Maximum the insurer will pay for property damage per accident
So, a 50/100/50 policy would cover:
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Up to $50,000 for injuries to one person,
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Up to $100,000 total for injuries to all people involved,
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And up to $50,000 for damage to vehicles or property (buildings, homes, fences, etc).
Why These Limits Matter
If you cause a serious accident, these numbers may not go very far. Medical bills and car prices have risen significantly in recent years. Consider this:
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A new pickup truck can easily cost $65,000 or more.
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A single ambulance ride and ER visit can exceed $10,000.
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If multiple people are injured, your $100,000 total limit may be reached in seconds.
Once your insurance pays out its maximum limits, you are personally responsible for the rest.
That could mean:
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Out-of-pocket payments
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Lawsuits
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Wage garnishment
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Asset seizure
Real-World Example
Imagine you’re involved in a multi-car accident on a foggy morning on the Blue Ridge Parkway. You’re found at fault. Two people are seriously injured and both vehicles involved are totaled.
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Medical bills: $125,000
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Vehicle damage: $75,000
With a 50/100/50 policy, your insurer pays:
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$100,000 toward medical (you’re still short $25,000 and potentially more if the medical bills are not split evenly)
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$50,000 toward property damage (you’re short $25,000)
That’s $50,000 you’re personally responsible for—plus additional costs for pain and suffering for the injured parties, and legal expenses if you’re sued.
How to Protect Yourself
At Overbay Insurance Services, we recommend reviewing your liability limits regularly. While no one can predict when a major accident might take place, we work closely with our insureds to make sure they have a limit of liability with which they feel comfortable and protected. Often higher limits of liability can be added to the policy without dramatically increasing your premium.
We also encourage adding an umbrella policy, which can provide an extra $1 million or more in liability protection for as little as $12 – $15 per month.
Don’t Leave Your Future to Chance
Your liability limits might just look like numbers on a page—but they represent real dollars, real risks, and real consequences. If you’re unsure about your current limits, now is the time to review them.
Give Overbay Insurance Services a call today or stop by our office. We’ll walk you through your policy, explain your options, and help you choose coverage that truly protects what matters. If you are currently insured elsewhere, give us a call for a quote and coverage advice today!
