There are many insurance carriers to choose from in the country. Comparing the provisions of different policies offered by various insurance companies can be a difficult task. Take some time to understand the policies you are comparing. Bodily injury liability is a common term in the insurance industry. By reading this article, you will understand the meaning of the term and how it works to help you make an informed decision when you are shopping for auto insurance.
Defining Bodily Injury Liability
It is one of the primary provisions in most auto insurance policies. If you cause an automobile accident, you will be required by law to pay a certain amount of money for injuries caused to other people. It covers the driver of another vehicle, pedestrians, passengers in your car, and passengers in other cars that were involved in the accident. Bodily injury liability insurance pays the amount on your behalf and is similar to liability coverage for property.
The only difference between the two policies is that one covers the other party’s car while the other for the well-being of the affected person. Other than paying for medical expenses such as consultation fees and buying wheelchairs for injured people during the accident, the policy may also pay for the following costs:
- Compensation for Lost Income: If you cause an accident and someone receives serious injuries, they may be unable to perform their normal duties, and this leads to loss of income. Bodily injury liability coverage in your auto insurance policy will compensate the affected individuals for the loss. The limit of the compensation an injured person can get to compensate for their lost income varies depending on a state.
- Legal Fees Incurred: When you cause an accident, the injured person or their insurance company may sue you in a court of law. The bodily injury liability coverage will compensate for the legal fees incurred after hiring an attorney.
How Bodily Injury Liability Policies Work
In some states, car owners are required by law to have a bodily injury liability cover as part of their car insurance. If you have this type of an insurance policy, you will not need to cater to the medical expenses of an injured person from your pockets if you cause an accident. One of the main benefits of having a bodily injury liability policy is that you will get peace of mind whenever you are driving your car.
Bodily Injury Liability Limits
If there is a legal requirement for car owners to have bodily injury liability in your state, you may also hear about minimum liability limits. A minimum limit refers to a minimum coverage that a car owner should have. The following are the main liability limits:
- Per-Person Limit: It refers to the amount of money that an insurance company will pay for each person involved in an accident. For example, if the per-person limit in your policy is $20,000, the insurer will pay up to $20,000 for medical expenses of one person.
- Per-Accident Limit: It refers to the limit for each accident where several people were injured. For example, if the per-accident limit in your auto insurance is $100,000 and you cause an accident where 5 people are injured, the policy will only pay a maximum of $100,000 for the medical expenses incurred by the 5 people.
The Difference between Bodily Injury Liability and Personal Injury Insurance
A personal insurance cover protects you and the passengers in your car. Policyholders get compensation whether they caused the accident or not. Some states require car owners to have personal injury protection as part of their auto insurance. The policy will pay for the medical expenses you will incur after an accident and the loss of income. The insurer will also pay for some funeral expenses if a policyholder loses their life.
The Provisions of an Umbrella Policy
It offers broader coverage as compared to the typical property damage liability and bodily injury liability policies. You can purchase an umbrella policy if you feel that you need extra coverage. It may also offer compensation for the legal fees you may incur after an accident.
Finally, you may incur huge losses when you are involved in an accident, taking adequate insurance coverage will give you peace of mind as you will enjoy the benefits explained above.