THE FIRST AND SECOND THING YOU NEED TO KNOW: BODILY INJURY LIABILITY Bodily Injury Liability (BIL) is an important component of your auto insurance coverage. If you are found to be at fault for a car accident that has resulted in injuries for one or more people other than yourself, bodily injury liability coverage is
The Advantages of a Higher Limit Auto Insurance Policy
what pays for the costs associated with those injuries—it will
Many people try to justify lower levels of auto
As an example, let’s say your policy states that your BIL is
insurance as a "smart decision" because of the short
25/50. What that means is that you will be covered for dam-
term savings. However, there are many advantages
ages up to $25,000 per person with a cap of $50,000 for any
to higher limit policies that far outweigh the savings
and all injured individuals involved in the accident. Anything
you may receive from a policy that does not truly
over either of these amounts will be your responsibility. You
cover your driving needs.
might now start to see the fallacy of “full coverage.” Cause
also pay for your legal defense if you are sued for damages by an injured party. Makes sense, right? But it’s the first two of those three numbers that apply to bodily injury liability, and it’s important to understand how each of them relates to your coverage.
an accident that injuries one or two individuals, and you’re YOU ARE RESPONSIBLE FOR LESS. The entire point
covered up to $25,000 for each person. Cause a multi-car
of having auto insurance is to keep your finances in
crash where each vehicle has multiple passengers—certainly
order. Remember that you are responsible for all
a possibility on today’s fast-moving and overcrowded road-
aspects of the accident that your insurance company
ways—and you could be looking at half a dozen people with
is not contracted to pay. For most people, it’s easier
injuries and only an average of $8333.33 to cover their costs.
to pay a little at a time than paying a lot at once. BUT WHAT ABOUT PROPERTY DAMAGE? PEACE OF MIND. One second of misplaced attention
Before we get too deep into the discussion over what’s
can cost you tens or even hundreds of thousands
“enough” coverage in the way of bodily injury liability,
of dollars that probably took you quite a while to
it’s important to understand that third and final number
earn. Higher levels of insurance keep your mistakes
of minimum insurance—property damage liability. Again,
from bankrupting your finances and stalling out your
when you are found at fault for a car accident, property
entire life.
damage liability is the amount your insurance policy will pay up to in order to cover the costs associated with
PROTECTING YOUR LOVED ONES. Remember that
repairing or replacing another person's property. More
it’s often more than you who will be affected by an
than likely, this will involve any damage done to someone
accident. While most are minor, many auto accidents
else's car, but it could also apply to items damaged that
can result in serious injury or even death. Whether
were inside a vehicle or even your neighbor’s fence if you
it’s you as the driver or those who are passengers
were to back into it. So, if you have a 25/50/15 policy,
in the vehicle, a serious accident can put physical,
the amount up to which your policy will pay out for other
psychological and financial burdens on your family.
people’s property would $15,000. Note the wording, “other people’s property.” Don’t make the mistake in
PROTECTING YOUR ASSETS. If you are not properly
thinking that property damage liability will cover
insured and at fault for an accident, you must pay
damage to your vehicle, because it won’t. Remember,
the opposing party for damages and injuries. If you
these components of your insurance coverage are in
don’t have the money, that party may go after your
response to state-imposed minimums, and your state is
personal assets. Depending on the level of damage,
only concerned about any harm or cost you may cause
your house, car, business and other assets may be at
others—if you’re worried about your brand new convert-
considerable risk
ible, you’ll need to ensure you have collision coverage and most likely comprehensive as well.
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