If you drive a car, chances are you’ve got bodily injury liability. Bodily injury liability is a requirement in most states, along with damage liability. It’s the minimum amount of insurance you’re required to carry if you drive a car. Although it also applies to other types of insurance like homeowner’s, business and workers compensation, it’s associated mostly with cars.
What Is Bodily Injury Insurance?
Bodily injury insurance is a requirement in most states to make sure that if you hit another driver and they get injured, you’re covered. It’s different from damage liability insurance, which pays for others’ property if you’re in a car accident and it’s your fault.
While bodily injury liability insurance covers the other driver’s medical costs from injury deemed your fault, it can also cover your legal fees if you get sued for causing the accident. There are limits on bodily injury policies, and premiums depend on your driving record plus how much coverage you require. While states have laws on coverage minimums, you can have more insurance if you choose.
What Does Bodily Injury Insurance Cover?
Bodily injury insurance covers medical expenses for the other driver in case of accident, if you are at fault, for both the short and long term. It doesn’t stop there, however. Besides the driver, any passengers, pedestrians or bystanders injured because of the accident are covered as well. Bodily injury insurance covers:
- Medical expenses: bodily injury insurance covers medical costs for hospital fees and emergency care. It can also cover follow-up visits related to the accident.
- Legal fees: if you get sued because of the accident, bodily injury insurance sometimes pays your legal fees.
- Loss of income (lost wages): if the injured party misses work or loses income because of the accident, bodily injury insurance may compensate them for the money they lose.
- Pain and suffering: in the case the injured party claims extended pain or emotional distress, bodily injury insurance may pay to cover these costs.
- Funeral costs: in the event of death, bodily injury insurance will help pay for funeral costs.
How bodily injury liability works
While bodily injury liability insurance applies to all kinds of property, it’s applied mostly to automobiles.
Car liability insurance policies come in two forms:
- Combined single-limit
- Split limit
In the case of a combined single-limit policy, the insurer decides how much coverage you get, and that’s divided between property damage and bodily injury based on the particulars of the given accident.
With a split-limit policy, the insurer decides how much it pays for each type of coverage ahead of time. These policies tend to look like this: 25/50/20.
The first number (in the thousands) is the limit of the dollar amount your insurer will pay per person per accident. The second number is the maximum payout per accident, and the third number is the property damage limit. The minimum amount of auto insurance liability coverage is determined state by state. Currently, two states do not require liability coverage at all.
Types of Policies That Offer Bodily Injury Insurance
Car Insurance
If you’re in a car accident and it’s your fault, things can get very expensive. If you’re not insured, there’s going to be big trouble. For this reason, most states require motorists to carry a minimum amount of liability auto insurance, both bodily injury and damage liability. For those who do not drive new cars or have no car note to pay, liability insurance is the only requirement.
In fact, 48 out of 50 states have minimum liability requirements when it comes to motorists. The only two states that don’t require minimum liability insurance are Florida and New Jersey. Most states require a minimum amount somewhere between $20,000 and $60,000. Alaska and Maine are the most expensive with minimum liability coverage limits per accident set at $100,000. Despite the minimum requirements, remember you can always opt-in for more coverage as you see fit.
Homeowners Insurance
While auto insurance is the main concern when it comes to bodily injury insurance, it’s not the only one. Accidents can happen in other places besides automobiles, like at someone’s home. If you own a home, you have bodily injury insurance as a part of your homeowners policy.
Liability insurance for your home is part of any basic homeowners policy. If someone is accidentally injured either inside or outside your home, as long as it’s on your property, you’ll be held liable for costs involved in bodily injury. Bodily injuries include everything from a simple trip and fall to dog bites. Make sure you go over your homeowner’s policy carefully to know exactly how much coverage you’ve got. If you don’t feel adequately protected, you can always up the coverage.
Property Insurance
If you own property other than your home, like a rental house, apartments or a commercial building for your business, you have property insurance. Property insurance covers everything from fire and burst pipes to theft and vandalism. Property insurance policies also have liability components built in to protect you financially in case of bodily injury to others.
Just having liability insurance, however, doesn’t mean you have enough. Make sure you have enough liability coverage in case anyone gets hurt. Just like with your home, anyone could fall down or be bitten by a dog. If it happens on property you own, you can be held liable and be forced to pay. It’s a good idea to have enough insurance.
Business Insurance
Business insurance is a little different than property insurance in that it doesn’t cover your property, physical structures like buildings or warehouses. Business insurance instead covers damage or physical harm upon someone else, usually a customer or client, if they’re harmed by your business or one of your products.
Business liability insurance is a general liability policy that offers financial protection to a customer, client or third party. Let’s say you produce or sell a product that winds up injuring someone, like the infamous Tylenol poisonings of the 1980s. You’re responsible for compensating all injured parties. There’s a good chance you’ll have to pay for all medical bills and lawsuits.
Insurance coverage for bodily injury claims can include:
- Medical bills and hospital care
- Lost income
- Physical therapy
- Long-term care
- Funeral expenses
- Pain and suffering
- Legal fees
- Settlements and court-ordered judgments
It’s important you have enough liability coverage for anything that might come your way. You never know when your liabilities could destroy your business, so make sure you’ve got plenty of insurance.
Workers Compensation
Workers compensation, or workers comp, is another type of bodily injury insurance. It’s required by law if you own a business. There are subtle differences, however. In this case, instead of the injured party being a customer or client, it would be an employee or worker at your place of business.
Workers comp is there to protect your workers by giving them employee benefits due to work-related injury. Workers comp insurance benefits employees by covering:
- Medical treatments
- Disability benefits
- Vocational rehabilitation
- Death and funeral services
- Lost wages
If you’re an employer, you’re most likely required to carry workers comp. Just having coverage isn’t enough; it’s important you make sure how much coverage you have. Accidents at the workplace can be small like a sprained ankle, or they can be lifelong, like permanent disability. The wrong disaster at your place of business could mean the end of your company if you don’t have enough insurance.
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Final Thoughts on Bodily Injury Insurance
Whether it’s a government requirement or you feel you need added protection, bodily injury insurance is a must. It’s not enough just to have insurance; you need to have the right amount. Bodily injury insurance is a must for your:
- Car
- Home
- Property
- Business
- Employees
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Frequently Asked Questions
How much bodily injury insurance do you need?
The amount of insurance you need depends on your requirements. How much do you have to protect? Make sure whatever happens, you’re not sent into bankruptcy. As far as cars go, most states require a minimum amount somewhere between $20,000 and $60,000. Alaska and Maine are the most expensive with minimum liability coverage limits per accident set at $100,000.
What is bodily injury?
As far as insurance goes, bodily injury is harm caused to another person because of an accident that’s your fault. Whether it’s an accident in a car, a house, on someone’s property or done by someone’s business, bodily injury can lead to extensive medical bills that the owner of the property may be held responsible for. Without bodily injury insurance, the owner may have to pay expenses out of their own pocket. This circumstance could be financially catastrophic. To stop this from happening, make sure you have the right amount of bodily injury insurance coverage.
About Philip Loyd, Licensed Insurance Agent
Loyd has written for Forbes.com, Red News Real Estate, Therapist.com, IRA.com, McGraw Hill, TheStreet.com, WikiHow, GOBankingRates.com, S.R. Education, Society of Petroleum Engineers and BioTech Fortunes. He is a licensed insurance agent and financial advisor with both his series 6 and 7 certifications.