Bodily Injury Policy (BI) Liability Insurance Coverage

Bodily Injury coverage is required by most states and it’s designed to cover various expenses to individuals in the event of an accident. It usually covers injured parties medical bills and expenses while in hospital as well as other related costs such as lost income, but it doesn't cover damage to property. If you strike a pedestrian or another vehicle while driving your automobile, you will be held liable for the physical damage caused by your vehicle to the pedestrian, passengers in your car and people in the other vehicle.

Bodily injury liability coverage pays for injuries you cause to other individuals while operating your vehicle up to the limit of your policy coverage you have purchased from your insurance provider.

When choosing your bodily Injury coverage in your insurance policy, you should set the limit based on the level of injury your vehicle may cause in the event of an accident. A better way to calculate it is to have as much bodily injury coverage as the net worth of your personal assets. This is basically taking into account how much of your personal assets would be at risk if you didn't have bodily injury liability coverage. Bodily injury coverage can be either split limit or combined single limit.

Split Limit Coverage:

Choosing this option means that your automobile insurance will pay one maximum amount for bodily injury to one individual or a higher limit to two or more people.

To clarify split limit coverage payout, here are some accident scenarios as an example:

  • Let’s say you purchased a split limit bodily injury liability coverage for a limit of $100,000/$300,000. Here is what you would expect your insurance provider to pay in case of an accident:
  • If you hit car which John Smith was the driver and the only person in the vehicle, and John sustained $70,000 in physical injuries, your automobile insurance company will pay John $70,000.
  • If you hit John Smith’s vehicle, while he was the only occupant of the car, and John sustain $130,000 worth of physical injuries, your car insurance provider will pay John $100,000 from your bodily injury liability coverage. You will need to come up with the additional $30,000 from your personal finances.
  • If you were at fault of an accident were John Smith was in a vehicle with Mary Smith and the physical injury causes to each individuals is $140,000, your insurance company will pay both John and Mary a total of $200,000. That’s $100,000 each. You will be liable for the additional $80,000.

Combined Single Limit Coverage:

Combined single limit bodily injury coverage means that your insurer will pay a single payment per accident regardless of the number of people physical injured as a result. If you purchase a combined single limit policy with a limit of $300,000 and you were liable for $200,000 worth of damages to one driver, you insurance policy will pay out the total of $200,000.

If you caused an accident where four people were injured and each sustained $90,000 worth of physical damages, your insurance policy coverage will pay each person $75,000, because the total limit exceeded the policy limit of $300,000. You will be liable for the remaining $60,000.

As you may have realized, standard bodily injury coverage or one required by state law may not be sufficient. Purchasing higher bodily Injury liability coverage is not very expensive with most insurers and it’s worth considering. Not only it will protect you from expensive liabilities or possible law suits, but it’s will also save you money and protect you personal assets.

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