Bodily Injury Liability Insurance: What it Covers & How Much to Buy
Bodily injury liability is coverage that helps you pay for another person’s injuries in a car accident for which you are found to be at fault. It is one of two types of liability auto insurance. The other, property damage liability coverage, pays for damage you may cause to the other driver’s car. Some minimum amount of both types of liability car insurance is typically required by states.
Let’s take a closer look at exactly how bodily injury liability insurance works, what it covers, and how much you need.
What It Covers
Bodily injury insurance will cover a portion of the short- and long-term costs related to injuries. These include not just passengers, but also pedestrians and bystanders who may have been involved. Here are some examples of what bodily injury insurance typically covers:
Medical expenses. Bodily injury insurance covers hospital fees and emergency care associated with the accident. For some claims, it may also cover follow-up visits and equipment costs (such as crutches).
Legal fees. In case of an accident, the other party may file a lawsuit against you. Bodily injury insurance often covers legal defense fees and can help defray significant court costs.
Loss of income. Let’s say the other person suffers an injury that interferes with their ability to work – maybe they work in a physically demanding environment, or need several months of rehab. In this case, bodily injury insurance may compensate for this time period.
Pain and suffering. This can be a tricky cost to quantify, but the other party may claim repayment for lingering pain or emotional distress as a result of the injuries.
Funeral costs. In the event of fatalities, bodily injury coverage will also help pay for the funeral costs.
How It Works
Liability insurance packages come in two varieties: combined single limit policies and split limit policies. In a combined single limit policy, your policy will offer a certain amount of coverage, and you can decide how to divide that coverage between bodily injury and property damage.
If you purchase a split limit policy, you will notice that there are two numbers involved. The first number is the limit per person – the maximum amount that your insurance provider will pay for injury expenses for any single person involved in the accident. The second number is limit per accident, or the maximum amount the provider will cover for all people involved in the accident.
Using the above bodily injury liability policy limits (25,000/50,000), let’s look at a few scenarios.
Scenario 1: One person injured in an accident you cause. Total cost: $30,000. Although your policy covers up to $50,000 per accident, it only covers up to $25,000 per person. You are responsible for the remaining $5,000.
Scenario 2: Two people injured in an accident you cause. Total costs: $65,000 for person 1 and $20,000 for person 2. In this case, since your per limit is $25,000, you are responsible for the remaining $40,000 cost of Person 1’s medical bills. However, since your per accident limit is $50,000, your policy would cover the entirety of Person 2’s bills.
Scenario 3: Four people. Total costs: $20,000, $20,000, $15,000, $10,000. In this case, everyone is within the per person limit. However, the $65,000 total is above your per accident limit. In this case, the insurance company would cover payments based on the order the claims are processed in. After your $50,000 is used up, you’ll be responsible for the rest.
When looking at a split limit policy, you may also see a third number. This last number is the limit for property damage liability coverage. In that case, the limits may be expressed as 25,000/50,000/20,000.
How Much Is Required?
States typically require motorists to carry a minimum amount of bodily injury and property damage liability insurance. The map below shows the minimum amount of bodily injury coverage your state requires per person injured in the event of an accident.
Minimum liability coverage limits(per person/ per accident)
Minimum liability coverage limits(per person/ per accident)
|Alabama||$25,000 / $50,000||Montana||$25,000 / $50,000|
|Alaska||$50,000 / $100,000||Nebraska||$25,000 / $50,000|
|Arizona||$15,000 / $30,000||Nevada||$15,000 / $30,000|
|Arkansas||$25,000 / $50,000||New Hampshire||$25,000 / $50,000|
|California||$15,000 / $30,000||New Jersey||$15,000 / $30,000|
|Colorado||$25,000 / $50,000||New Mexico||$25,000 / $50,000|
|Connecticut||$20,000 / $40,000||New York||$25,000 / $50,000|
|Delaware||$15,000 / $30,000||North Carolina||$30,000 / $60,000|
|District of Columbia||$25,000 / $50,000||North Dakota||$25,000 / $50,000|
|Florida||$0 / $0||Ohio||$25,000 / $50,000|
|Georgia||$25,000 / $50,000||Oklahoma||$25,000 / $50,000|
|Hawaii||$20,000 / $40,000||Oregon||$25,000 / $50,000|
|Idaho||$20,000 / $50,000||Pennsylvania||$15,000 / $30,000|
|Illinois||$20,000 / $40,000||Rhode Island||$25,000 / $50,000|
|Indiana||$25,000 / $50,000||South Carolina||$25,000 / $50,000|
|Iowa||$20,000 / $40,000||South Dakota||$25,000 / $50,000|
|Kansas||$25,000 / $50,000||Tennessee||$25,000 / $50,000|
|Kentucky||$25,000 / $50,000||Texas||$30,000 / $60,000|
|Louisiana||$15,000 / $30,000||Utah||$25,000 / $65,000|
|Maine||$50,000 / $100,000||Vermont||$25,000 / $50,000|
|Maryland||$30,000 / $60,000||Virginia||$25,000 / $50,000|
|Massachusetts||$20,000 / $40,000||Washington||$25,000 / $50,000|
|Michigan||$20,000 / $40,000||West Virginia||$20,000 / $40,000|
|Minnesota||$30,000 / $60,000||Wisconsin||$25,000 / $50,000|
|Mississippi||$25,000 / $50,000||Wyoming||$25,000 / $50,000|
|Missouri||$25,000 / $50,000|
Minimum coverage requirements last updated November 2014
There is an exception to the rule of state-mandated insurance. Several states allow drivers to “self-insure” by demonstrating they could pay for any expenses that would result from an accident. This may involve posting a bond or depositing large amounts of savings with the state. New Hampshire is an example of a state that technically does not require drivers to carry insurance so long as they have significant funds at their disposal in the event of an accident. If a New Hampshire driver opts for insurance however—as nearly all do--they must meet the state’s minimum requirements.
How Much Does It Cost?
When deciding how much bodily injury liability insurance to buy, you may want to know how much additional coverage above the minimum required will cost.
The table below provides an example of the average additional cost drivers in Northern Virginia may incur annually if they purchase more than the $25,000/$50,000 coverage required in that state. Because insurance costs vary by driver, we provide the added cost for a driver with a clean driving record and others with a recent accident or traffic violation.
Added annual cost for additional coverage
|Coverage limits||From $25K/$50K to $50K/$100K||From $25K/$50K to $100K/$300K||From $25K/$50K to $500K/$500K|
|Driver with clean driving history||$16||$72||$154|
|Driver with recent speeding ticket||$20||$88||$176|
|Driver with recent accident||$24||$100||$240|
Note: Average calculated from quotes by multiple insurance providers for a 37-year old female with excellent credit in zip code 22209 driving a 2008 Honda Accord.
*Monthly cost also includes $50,000 in property damage liability insurance and collision and comprehensive insurance with $500 deductibles.
How Much Coverage Should I Buy?
While the average bodily injury claim in 2012 was about $14,600, according to the Insurance Research Council, your costs could spiral if you are found responsible for a car wreck that causes injuries (or even death) for multiple people. If these expenses exceed the limits on your insurance policy, the other parties may come after you for the balance, putting your assets at risk.
Our advice is to strongly consider buying the most coverage you can afford. This will not only allow you to protect your assets, it will also give you peace of mind that your insurance will cover expenses related to any injuries you cause. In any event, make sure you are covered at least by the minimum limit your state requires.
Image: Tom Wang/Shutterstock
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