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Bodily Injury Car Insurance Coverage: How Does It Work?

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Bodily Injury Liability (BI or BIL) insurance is one of the two forms of liabilty car insurance coverage that drivers are required to have in most states. While each state has its own minimum requirements for coverage, consumers can pay more and opt for greater coverage.

How Does Bodily Injury Liabilty Coverage Work?

You are required to have bodily injury coverage so that you can demonstrate financial responsibility if you are at fault in a motor vehicle accident that causes bodily harm to someone else. As a form of liability insurance, bodily injury does not cover the medical costs of injuries that you personally sustain, but rather, pays for the expenses that third parties may incur from any harm they sustain (for your own injuries, Personal Injury Protection provides coverage for your personal costs).

While shopping for auto insurance, your bodily injury coverage is generally stated using a range of coverage levels in a split limit format. The split limits will be described using either two or three numbers in the form of 25/50/10 or 25/50. In the three number format, the first two numbers correspond to the bodily injury coverage limits and the third is for property damage a separate type of coverage. These numbers indicate the:

Maximum $ for each person injured in an accident / Maximum $ covered per accident

The limits are generally in the thousands, so if you're being quoted a 25/50 limit for bodily injury, it means that the insurance policy will cover up to a maximum of $25,000 per person injured in an accident and a total of $50,000 in claims for a single accident. It's important to understand the distinctions between these individual components can have a material impact in what you may have to pay out of pocket in an accident. We'll look at two examples to explain how bodily injury liability would work.

  1. You were deemed at fault for an accident in which two people in the other vehicle were injured. Person A had medical expenses of $30,000 while Person B had medical expenses of $10,000. While the combined medical bills are within the $50,000 limit per accident, your auto insurance policy will only pay Person A $25,000, and Person B $10,000. That's because Person A's expenses exceeded the per person limit,

    leaving you liable for the $5,000 of the unpaid claim.

  2. You were at fault for an accident in which two people were injured. Both made medical expense claims of $25,000 each. Because both the individual claims were within the $25,000 and the combined claim was less than or equal to $50,000 the insurance policy would cover these expenses.

Combined Single Limit (CSL) is another – and less common – type of limit consumers may purchase. Compared to the split limit, CSL has one limit that applies to the whole accident, and can pay out to the total coverage amount and is not constrained the number of injured people. The flexibility of CSL limits make this type of limit more costly to insure for, and not every car insurance company provides this option.

What Can A Third Party Claim As Bodily Injury?

While the direct costs of treatment for injuries are the most obvious costs, a number of other types of expenses can be paid out as well. The types of expenses covered by bodily injury can include:

  • Bills for the other party's hospitalization, follow-up care, and related medical or health care
  • Lost Wages: If the harmed party was seriously injured and therefore unable to work, your bodily injury liability coverage makes up for their lost income. This amount will be based upon the amount of time they are unable to work as a result of the injury, and subject to various limits based on the state you reside in
  • Legal Fees: This is the one item where bodily injury pays for your expenses instead of the third party. Your insurer will usually provide legal defense for you if you are sued by the other party, and that's paid for under your own bodily injury coverage

Minimum Liability Requirements for Bodily Injury Coverage

Regulations in each state govern the minimum amount of coverage you are required to have as part of your auto insurance in order operate a vehicle legally. The most common BIL limit is $25,000, but the range can vary quite significantly, from the lowest of $10,000 per person in Florida to the highest requirement of $50,000 per person in Alaska. State minimums for bodily injury liability are displayed in the following table.

Category: Insurance

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