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What is Bodily Injury Liability Coverage and Do I Need it?

Updated on July 7, 2014
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When it comes to car insurance, it is something that everyone must have. There is no way to get around it. Since car insurance is required in all 50 states, it is important to understand your state’s laws regarding the type of insurance that you must have. The coverage that you must have along with optional coverage options is all part of financial planning strategies in most households. One type of insurance coverage that should be considered is bodily injury liability coverage.

What does Bodily Injury Liability Coverage Protect?

If you are involved in an accident that results in another person being harmed, it will be your responsibility to pay for the hospital care and all medical treatment the individual needs to recover. This is where bodily injury liability coverage comes into play. This part of your car insurance protection will pay for these expenses.

We all know how expensive medical care can be. Imagine being involved in an accident that is found to be your fault and having to pay not only for all of the damages, but all of the medical expenses as well. It is likely that these costs will bankrupt you. For this reason, even if your state does not require bodily injury coverage as part of the state minimum policy, it is still a good idea to have it added to your car insurance coverage.

How Much Bodily Injury Coverage Should I Get?

While most states do require some form of bodily injury coverage, there are states that do not. In addition, many state requirements are very low and are often not enough to fully cover any accident. Imagine that your bodily injury coverage is for $25,000 and you are involved in an accident where an individual is badly injured and has to stay in the hospital for a few days. The $25,000 you have for coverage will not even begin to cover the medical expenses and you will be stuck with the difference plus your deductible.

In order to understand how much coverage you should have, you first need to look at how insurance policies work. Typically, an insurance policy will involve something known as a split limit. This means that there will be a per person limit and a maximum total accident coverage, for example some policies will be $100,000/$300,000, which means that the policy will pay $100,000 for each individual and up to $300,000 total for the accident.

Insurance companies will usually have set recommendations available for you to consider when purchasing a policy. It is likely that you are thinking about the cost of the premiums, but instead you should think about how if you do not have enough coverage, just one accident could financially cripple you for the rest of your life.

The limits set by insurance companies will take into consideration your total net asset value and expected net worth for the future. If you are currently renting your home and have a low income, then you will not need as much coverage, simply because there is not a lot for a lawyer to go after should you be sued after an accident. However, if you own your home and have a fairly high salary, it is important that you maintain enough insurance coverage to make sure that all the things you have worked so hard for are not taken away.

Choosing an Insurance Company

When choosing an insurance company, it is important to compare costs and read reviews about each company that you are considering. Several car insurance comparison websites offer an easy way to compare insurance quotes from several different companies all at one time. In addition, these websites will allow you to compare the coverage that is being offered from each of the different companies.

The most important thing to remember is to make sure that you have the right amount of car insurance to meet your needs. Bodily injury liability protection is extremely important, so make sure that it is part of your new insurance policy.

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    • SpiffyD profile image

      SpiffyD 

      7 years ago from The Caribbean

      Having having minimums seems like a good idea, especially as liability coverage for this purpose has no real limit. However, given the potentially adverse effect on premiums, I can see why some states use a lower minimum. Nice hub though. Voted useful.

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