If you’ve purchased auto insurance, or even researched the different policies available, you’ve likely seen or heard about Bodily Injury Liability (BIL) insurance as part of most auto insurance packages. It’s a critical part of every auto insurance policy, and it’s legally required in many states. Let’s take a look at this piece of the auto insurance puzzle and decipher what it is and how it works.
What It Is
BIL insurance is the insurance coverage you purchase to cover any injuries that you cause to other individuals in an accident. This extends to the drivers and passengers of other automobiles, and to any pedestrians that are involved as well. Bodily Injury Liability insurance is typically sold with two different liability amounts attached, looking something like “$25,000 / $50,000”. Virtually every state that has “at-fault” insurance requires that drivers have Bodily Injury Liability insurance coverage, with the minimum amounts typically ranging from $5,000/$10,000 up to $30,000/$60,000 depending on the state.
The first amount ($25,000 in this example) dictates how much coverage you have per person, per accident. If you cause an accident with another car that has three passengers, the limit of coverage you have for each person’s injuries would be $25,000. If, for instance, the driver suffered serious injuries and the treatment cost was $40,000, your insurance would pick up just the first $25,000 – leaving you to pay for the remainder.
The second amount ($50,000 in our example) dictates how much coverage you have for all parties in a single accident. Using the above three passenger accident, if each passenger had $20,000 in medical treatment costs, your insurance would only cover the first $50,000 of this, and you would be on the hook for the remainder. Your auto insurance agent can share some advice on how to pair up these two coverage amounts to ensure you are properly covered against most accident risks.
What It Covers
Bodily Injury Liability insurance covers items like medical treatment costs, rehabilitation costs, hospital bills, pain and suffering payouts, and any lost wages that the injured parties suffer. It doesn’t cover anything to do with automobile damage, or any other property damage. And most importantly, it doesn’t extend to anyone in your car. Bodily Injury Liability coverage is strictly for injuries to the other party when you cause an accident.
Do You Need It?
There’s no question that you absolutely need BIL insurance, which is why it’s legally required in most states. Should you end up being sued by the other party in the accident, without this type of insurance you could end up being on the hook for a massive judgment that would need to be paid out of pocket. There have been instances of judgments in the hundreds of thousands of dollars, so Bodily Injury Liability coverage is well worth the investment.
The answer to “how much coverage do I need?” is a bit of a complicated one. As mentioned above, every state will have a different set of minimum amounts of coverage for Bodily Injury Liability insurance. While you’re free to go with the minimum – it really is best to get as much as you can afford. The medical treatment and rehabilitation bills resulting from a serious automobile accident can be staggering, reaching in to the tens of thousands of dollars. An individual who has only purchased a required minimum as low as $5,000 or $10,000 can end up being on the hook for much, much more – and it will have to be paid out of pocket. Keep this in mind when you’re choosing your coverage level!
To sum things up – you’ll want to ensure that you have adequate BIL insurance for every driver that drives your car, including any licensed children. Getting as much as you can afford – or as much that you have room for in your budget – is an excellent idea and while it may not ever be needed, it will come in handy should an accident occur.
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