Haris Ashley
Bodily injury auto insurance is a type of liability insurance that covers injury-related costs incurred by people involved in a car accident where you are at fault. This includes medical costs, lost income, funeral costs, and legal fees if you are sued because of the accident. While most states require some level of bodily injury liability insurance, the minimum coverage may not be enough to cover all expenses. It is recommended to have enough liability coverage to protect your assets in case of a lawsuit.
| Characteristics | Values |
|---|---|
| What it covers | Medical expenses, lost wages, funeral costs, pain and suffering, legal fees |
| Who it covers | Other drivers and their passengers, passengers in your car if they are not from your household |
| What it doesn't cover | Your own medical costs, repairs or property damage |
| Cost | The national average cost for liability insurance is $650.35 a year |
| State requirements | Nearly every state in the US requires bodily injury liability insurance |
What You'll Learn
What does bodily injury liability insurance cover?
Bodily injury liability insurance is a critical component of auto insurance policies, providing financial protection if you are at fault in a car accident that results in injuries to others. This type of coverage is required by most states and is included in standard auto insurance policies. Here's what you need to know about what bodily injury liability insurance covers:
Medical Expenses
Bodily injury liability insurance covers the medical expenses of individuals other than the policyholder and their household members who are injured in an accident where the policyholder is at fault. This includes emergency care, hospital fees, follow-up visits, medical equipment, doctor's visits, and rehabilitation costs. It's important to note that this coverage is for third-party injuries, and does not extend to the policyholder or their passengers.
Lost Wages
If the injured party is unable to work due to their injuries, bodily injury liability coverage can compensate for their lost income. This coverage is typically based on the amount of time the injured person is unable to work and is subject to certain limits based on the location.
Legal Fees
In the event that the injured party takes legal action against the policyholder, bodily injury liability insurance can provide financial assistance. It covers legal defence costs, court fees, and, if the policy includes sufficient liability coverage, the expenses of a defence attorney.
Funeral Costs
In tragic cases where an accident results in a fatality, bodily injury liability coverage can help alleviate the financial burden by paying for funeral and burial expenses.
Pain and Suffering
If the injured individuals experience long-lasting emotional trauma or pain due to the accident, bodily injury liability insurance may provide coverage for these intangible damages.
It is important to note that bodily injury liability insurance does not cover the policyholder's own expenses, including their medical costs, vehicle repairs, or property damage. Additionally, each state may have different requirements and minimum coverage limits for bodily injury liability insurance. It is recommended to review your state's specific guidelines and consult with insurance professionals to ensure adequate coverage.
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What does bodily injury liability insurance not cover?
Bodily injury liability insurance does not cover the medical costs of injuries sustained by the policyholder or their passengers. It is considered third-party insurance, meaning it only pays for damage to other drivers and passengers. To cover the medical costs of injuries to yourself and your passengers, you will need medical payments or personal injury protection coverage.
Bodily injury liability insurance also does not cover damage to another driver's vehicle. To cover this, you will need property damage liability coverage, which is usually required with a minimum coverage policy.
Additionally, bodily injury liability insurance does not cover damage to your own vehicle. Collision and comprehensive coverages protect your vehicle when you cause an accident.
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How much bodily injury liability insurance do you need?
The amount of bodily injury liability insurance you need depends on your state's legal requirements and your net worth.
State Requirements
Nearly every state in the US requires bodily injury liability insurance. The minimum coverage policies typically include bodily injury liability insurance. However, the minimum protection may not be sufficient. It is recommended to know how much protection you are required to have by state law.
Net Worth
In general, it is recommended to have enough coverage to cover your net worth (what you own minus what you owe). If you don't have enough liability coverage to pay for an at-fault accident, you will still be responsible for paying for the other person's injuries. This could result in the other driver suing you, potentially putting your savings, house, and other assets at risk.
Recommended Coverage
Some experts recommend having bodily injury limits of at least $100,000/$300,000. Many auto insurers won't sell bodily injury liability coverage over $500,000. If your insurer doesn't sell a policy with limits high enough to cover your net worth, consider buying umbrella insurance.
Example
If your net worth is $90,000, then a good car insurance policy for you might be structured as $50,000/$100,000/$50,000, giving you $100,000 in total bodily injury coverage per accident.
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Is bodily injury coverage required in every state?
While nearly every state in the US requires bodily injury liability coverage, there are a few exceptions. Florida, New Hampshire, Virginia, and New Jersey do not require bodily injury coverage, but they do have other mandates that drivers must meet.
In Florida, you are only required to carry personal injury protection (PIP) and property damage liability (PDL) insurance. The minimum coverage limits are $10,000 for PIP and $10,000 for PDL. However, if you have been convicted of a DUI in Florida, you must carry bodily injury liability coverage for three years after your license has been reinstated.
New Hampshire is one of the only states that does not require car insurance. However, if you choose to purchase car insurance, the minimum liability coverage requirements are 25/50/25. You are also required to purchase uninsured/underinsured motorist insurance and medical payments coverage.
Virginia does not require car insurance, but drivers must pay a yearly $500 uninsured motorist fee to waive the insurance requirement. This option is being repealed beginning July 1, 2024.
New Jersey offers two main policy types: basic and standard. While bodily injury coverage is required under a standard policy, it is optional for those with a basic policy. However, the maximum limit for bodily injury coverage under a basic policy is $10,000 per accident.
While these states may not require bodily injury coverage, it is still important to consider the potential consequences of waiving this coverage. The national average cost of bodily injuries in an accident was $24,211 in 2022, and being involved in an at-fault accident without bodily injury coverage could result in license suspensions, fines, and significant out-of-pocket expenses.
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How much does bodily injury liability insurance cost?
The cost of bodily injury liability insurance varies depending on the state and the coverage amount. In Pennsylvania, for example, the average cost of a state minimum coverage policy with $15,000 per person and $30,000 per accident in bodily injury coverage is $532 per year. On the other hand, increasing the bodily injury coverage to $100,000 per person and $200,000 per accident only raises the annual premium to $627, which is an 18% increase.
The national average cost of a minimum coverage liability-only policy is $644 per year, according to Bankrate's analysis. However, it's important to note that rates can vary based on factors such as location, vehicle, driving history, and credit score.
When deciding on the amount of bodily injury liability coverage to purchase, it is recommended to consider your net worth and choose a limit that will adequately protect your assets in the event of a lawsuit. Experts generally suggest having bodily injury limits of at least $100,000 per person and $300,000 per accident. If your net worth exceeds the coverage limits offered by standard insurance policies, you may want to consider purchasing an umbrella policy, which provides additional liability coverage above and beyond your auto insurance limits.
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Frequently asked questions
Bodily injury liability insurance covers medical expenses and other costs incurred by individuals other than the policyholder in the event of a car accident where the policyholder is at fault. It covers the other driver and their passengers, as well as pedestrians.
Bodily injury liability insurance covers medical bills, lost wages, funeral costs, and legal fees for the other driver. It does not cover the policyholder's own medical expenses or damage to their vehicle.
The amount of bodily injury liability insurance required varies by state. It's recommended to have enough coverage to protect your assets in the event of a lawsuit. A common minimum coverage limit is $25,000 per person and $50,000 per accident.
