In liability insurance, the three numbers N1/N2/N3 represent coverage limits in thousands of dollars. These limits indicate the maximum amount your insurance will pay in different situations. Here’s what each number means:
- N1 – Bodily Injury Per Person: The maximum amount the insurer will pay for injuries to a single person in an accident.
- N2 – Bodily Injury Per Accident: The total maximum amount the insurer will pay for all injuries in a single accident.
- N3 – Property Damage Per Accident: The maximum amount the insurer will pay for damage to someone else’s property (e.g., their car, a fence, or a building).
Example: 50/100/50
- $50,000 for bodily injury per person
- $100,000 for total bodily injury per accident
- $50,000 for property damage per accident
Use Case 1:
If only one person was injured in the above example, and the medical bill was $30,000. The insurance company will pay the $30,000 in full.
Use Case 2:
If only one person was injured in the above example, and the medical bill was $60,000.
The insurance company will pay the only $50,000 and you might be responsible to pay the remaining $10,000 to cover the medical expenses.
Use Case 3:
If two people were injured in the above example, and the medical bill was $40,000 for person 1 and $60,000 for person 2.
The insurance company will pay only $90,000 and you might be responsible to pay the remaining $10,000, because although the sum is $100,000, the maximum payout per person is still $50,000. So, the insurance company will pay respectively $40,000 for person 1 and $50,000 for person 2.
Use Case 4:
If three people were injured in the above example, and the medical bill was $10,000 for person 1 and person 2, and $70,000 for person 3.
The insurance company will pay only $70,000 and you might be responsible to pay the remaining $20,000 to cover the medical expenses.
The insurance company will pay $50,000 for person 3, and $10,000 for 1 and 2.