Bodily Injury Liability Coverage

Otherwise known as “BI”, this covers other people’s bodily injuries or death in the event of an accident which you are at-fault for. Your Bodily Injury limit is the amount your insurance company will pay a third party in a civil case. Typical claims for bodily injury usually include payment for hospital bills, loss of wages, and/or pain and suffering. Bodily injury liability covers the damage done to the “third party”, not your vehicle or you or other people on your policy. In most states bodily injury liability is mandatory up to a certain minimum. For the liability insurance requirements in your state please visit Auto Insurance By State.

Keep in mind that liability limits set by the state, maybe too low, and in the event of accident may put you at severe financial risk in a civil suit. For instance, if either you or a driver covered by your policy causes an injury to a third party where damages go above your limits, you will be held responsible for the amount above your limits. So if your liability limit is $15,000 and you are held responsible for $1 million, you are going to have to cover the difference. To make that payment, you could be forced to sell property, savings, and other assets, or have your wages garnished. By purchasing adequate liability limits that take into account your net worth, you can avoid such financial ruin.

Also be aware that Bodily Injury Liability is paid out on a per occurrence basis. This basically means for every accident you are involved in you can use up to your prescribed limit.