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Anyone who has ever taken the time to read through their auto insurance policy has surely have noticed their bodily injury liability coverage. Obviously, this is a part of the policy that one never hopes to use, but with more cars on the road than ever before, amongst other variables, it is vital that you read the fine print in regard to bodily injury liability. The fine print will tell you how much coverage you have in case of the unforeseen, as well as potentially saving you a lot of money. This is what you need to know about bodily injury liability insurance and how to go about deciding how much coverage you need.
What Is Bodily Injury Liability Insurance?
The simple definition of bodily injury liability insurance (otherwise seen as “BI” in your insurance policy) is a sub-policy in your automotive insurance. It is this sub-policy that protects you financially in case you are at fault for an accident that injuries someone else. Financial protection in this case means paying for medical bills, lawyer fees and other expenses in the event that you are sued. This insurance is applicable to passengers riding in your automobile and individuals in other cars that were injured.
Depending on your province or state of residence, bodily injury liability insurance is usually required by law, at least a minimum amount of coverage, that is. The reason for this is for the protection of yourself, the individuals that you may potentially injure and for the province or state’s protection as well. As we all know, medicals costs can be high, even if the province or state is paying for the brunt of the costs. Legal minimums can vary, but the usual amount is somewhere in the neighbourhood of $50,000, but that may not be enough in cases where an individual is sued. However, the total typical amount can range from $100,000 to $500,000, but as we will see, you can adjust your policy so that you are covered for even more.
How Much Coverage Do I Need?
This is an area of your auto insurance that you should never skimp on. If you are involved in an accident where another individual is injured and it is determined that it is your fault, you are now liable for all damages incurred. Thankfully, your automotive insurance will take care of this when necessary. When it comes to selecting a limit, do not aim low; aim high. Beforehand, it is a good idea to check your medical insurance policy to see how much it covers in cases of automotive accidents.
Do not break the bank; you have to be able to afford your monthly insurance payments. In other words, use financial common sense when selecting your limit. If you have to cut back a bit in disposable income, so be it. You’ll be thankful if you wind up rear-ending someone and are sued by the driver or occupants of the vehicle.
What If I Don’t Have Enough Coverage?
If your bodily injury liability policy is indeed low, you are setting yourself up for potential financial ruin in case of a serious accident that you are found responsible for. For example, in cases where an individual is seriously injured in auto accident, your insurance will pay for medical bills up to a limit that you have specified in your policy. However, if the medical bills exceed the amount specified in the policy, you are now on the hook for everything else.
If a lawsuit is filed against you and the damages awarded or lawyer fees exceed your coverage, you’re responsible for that as well.
On The Hook
If this occurs, you are now legally responsible to make payments as specified by either legal proceedings or by your auto insurance provider. These rather hefty payments can seriously cut into your budget. For example, you may be forced to sell property (including your house), give up savings you’ve put away and even devote your future earnings from your salary or retirement benefits. Frankly put, no one wants that.
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