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Bodily Injury Liability Insurance
Bodily Injury Liability Insurance (BI) is a must on the roads. In most states purchasing a minimal amount of this coverage is a requirement. Bodily Injury Liability combined with Property Damage Liability coverage is the Auto Insurance policy basis.
By definition, BI is an Auto coverage type, which covers the medical costs of injury you or members of your family might cause to other people in an accident, loss of income for the party you injure, as well as the costs of your legal defense if you are found responsible for injury or death and get sued. This type of Auto Insurance may also cover other people who drive your vehicle with your permission.
Mind however, that Bodily Injury Liability covers injury to people resulting from an accident you are at fault for, not damage to your car or injuries to passengers in your car. It does not pay for your own injuries or the ones of your spouse or other family members either. This is the sphere of Medical Payment Coverage, which applies to passengers in your car.
Claims for Bodily Injury Liability Insurance include medical bills, pain and suffering and loss of income. In case you are sued for damages and injuries to persons, the legal fees can be so high that they can easily lead you to bankruptcy if you are not properly covered. Even if all your valuable assets are your car and your home, and the court would not normally require you to sell them in order to satisfy judgement against you, there will be placed a judgement lien against your home, which may wait till you eventually sell your home. This judgement lien may remain effective for as long as 20 years. Therefore it is vitally important to have Bodily Liability Insurance to be protected in court as well.
The rates for this type of insurance vary from state to state and depend on a number of factors including your age and driving record. The amount of Bodily Liability Insurance Coverage may also be different with different insurance carriers and can range between one person per claim coverage to covering everyone injured in an accident. You can also find more specific coverage, which offers a cap per person and another cap per accident. If a policy provides say $250,000/$550,000, then in the event of an accident you can expect the insurance company to pay $250,000 per person and $550,000 per accident.
There are different limits of Bodily Injury Liability coverage offered to fit various levels of protection. The state's minimum insurance is unlikely to serve as an adequate coverage for you in case you are found liable for a serious traffic accident with injuries caused to other people. Therefore, it is wise to consider buying higher limits than the minimum your state requires. You should purchase the Bodily Injury Liability coverage limits equal to the net asset value you currently have and your future net worth that you could possibly lose in the event of causing damages to others.
Do not put yourself at risk by selecting low Bodily Injury Liability coverage limits. If you cause a serious injury with damages exceeding your insurance limits, you will have to make payments above your limits, which might even mean liquidating your savings, property and assets, as well as your future earnings.
The amount of Bodily Injury Liability coverage you need depends on your personal assets. If you don't own a home and your annual income does not exceed $25,000, a 50,000/100,000 split limit may be enough. If you own a home and your income is over $100,000, then a 100,000/300,000 split limit will be more adequate. The general advice here may be to purchase as much Bodily Injury Liability coverage as you can afford without pruning the budget much. For wealthy consumers insurance companies offer an umbrella policy, which gives coverage for all liability claims for one million dollars or even more.