Bodily Injury Liability (BI or BIL) insurance is one of the two forms of liability car insurance coverage that pay for any damages you caused other drivers. Most states require minimum limits of this coverage to demonstrate your financial responsibility on the road, but consumers can pay more and opt for greater coverage.
Table of Contents
- How Does Bodily Liability Coverage Work?
- How to Understand Bodily Injury Limits
- How Much BI Coverage Should You Have?
- How Much Does Bodily Injury Liability Cost?
- How to File a Bodily Injury Liability Claim
Bodily Injury Liability insurance pays for injuries you cause to another driver if you are at-fault in the accident. Bodily injury does not cover the medical costs of injuries you may get in the accident. It is considered a "third-party" insurance, since it only covers other drivers and passengers (you're the "first-party").
What Can A Third Party Claim As Bodily Injury?
The types of expenses a third-party can file against your bodily injury liability policy include:
- Bills for the other party's hospitalization, follow-up care, and related medical or health care
- Lost Wages: If the harmed party was seriously injured and unable to work, your bodily injury liability coverage makes up for their lost income. This amount will be based upon the amount of time they are unable to work as a result of the injury, and subject to various limits based on where you live
- Legal Fees: This is the one item where bodily injury pays for your expenses instead of the third party. Your insurer will usually provide legal defense for you if you are sued by the other party, and that's paid for under your own bodily injury coverage
Your bodily injury coverage is stated in a three number format like so "25/50/25". In the three number format, the first two numbers are the bodily injury coverage limits and the third is for property damage, a separate type of coverage. The first number is the amount covered for one person in the accident, while the second number represents the amount covered in the entire accident. So for example, if you are quoted a 25/50 limit for bodily injury, it means that the insurance policy will cover up to a maximum of $25,000 per person injured in an accident and a total of $50,000 in claims for a single accident. We'll look at two examples to explain how bodily injury liability would work.
- You were deemed at fault for an accident in which two people in the other vehicle were injured. Person A had medical expenses of $30,000 while Person B had medical expenses of $10,000. While the combined medical bills are within the $50,000 limit per accident, your auto insurance policy will only pay Person A $25,000, and Person B $10,000. That's because Person A's expenses exceeded the per person limit, leaving you on the hook for the $5,000 of the unpaid claim.
- You were at fault for an accident in which two people were injured. Both made medical expense claims of $25,000 each. Because both the individual claims were within the $25,000 and the combined claim was less than or equal to $50,000 the insurance policy would cover these expenses.
Combined Single Limit (CSL) is another – and less common – type of limit consumers may purchase. Compared to the split limit, CSL has one limit that applies to the whole accident, and can pay out to the total coverage amount and is not constrained the number of injured people. The flexibility of CSL limits make this type of limit more costly to insure for, and not every car insurance company provides this option.
Each state has a minimum amount of coverage you are required to have as part of your auto insurance. The most common BIL limit is $25,000, but it changes. Florida doesn't even require this coverage. State minimums for bodily injury liability are displayed in the following table:
|State||Min. Coverage||State||Min. Coverage|
|District of Columbia||25,000/50,000||North Dakota||25,000/50,000|
You should get limits that match the amount of assets you have, or the highest limits that you can afford. That's because if your car insurance isn't enough to pay for the damages you cause, the other driver may take you to court and sue for the remainder. If the judges rule in their favor, your assets will have to be liquidated to pay for the court damages. If you have limited assets - as in not a lot of money stored in bank accounts, retirement accounts or other funds - it's likely that the other party will be willing to settle a claim for what the insurance company pays out. You don't have much risk in a lawsuit when there are less assets to spare. On the other hand if you are wealthy or have savings or investments, your financial risk and exposure in an accident increase. If you pick low limits, more of your assets are exposed when an accident results in hundreds of thousands of damages. Because you're exposed more, we recommend higher coverage limits - more of the claims brought against your bodily injury protection will be covered directly by your insurer. For more information on our liability limits, refer to our guide here. The next thing to consider is how affordable the car insurance policy will be.
Using quotes for a sample 34 year-old married man living in Indiana we can illustrate how price changes with different BI limits. Just remember, car insurance premiums are highly tailored to individual drivers' profiles, so these numbers are only for reference. We'll focus on how much it costs our driver to adjust from one limit to the next.
As the table below shows, our sample Indiana driver looking to increase his limits from 25/50 to 250/500 would pay $9 more a month, or $109 more altogether a year, for 10x the protection in Indiana. As drivers increase the amount of liability insurance protection, their premiums will increase at lower rates. For example, going from the state minimum of 25/50 to the next available limit results in a 34% increase in premiums for twice the protection. But once you have medium levels of bodily injury coverage, getting more protection will cost less - our driver would only have to pay 15% more moving from a 50/100 limit to a 100/300 limit. As we say above, opting for the highest limits may be a good idea if you have many assets to protect.
|Bodily Injury Liability Limits (per person/per accident)||Annual BIL Premium|
BI claims are considered "Third Party Claims", which means you are filing a claim against the at-fault driver’s insurance company, or they'll file against yours if you were at fault. In order to make sure a reasonable amount of your expenses are paid for, you will be required to document and keep record of the accident. Before making a claim, you should be prepared to provide:
- Records of what happened
- Photos of the scene and any injuries you sustain
- Records of medical examinations and any bills from doctors and health care providers
- Receipts of all related expenses
- Proof of lost wages: If the injuries you sustain cause you to miss work and potential income, documentation of this from your employer is necessary
After making a claim:
- You should hear back within a set time frame, as determined by your state and policy, or get an explanation for any delay
- Be prepared to discuss the incident. There may be conversations with a liability claim examiner or adjuster who may want clarification in order to assess the sustained injuries as well as the cost of the claim
- Your right to collect compensation for your claim may have a time limit as well: you may be required to accept a settlement within the required time frame as regulated by state law. You can either accept the offer or file a lawsuit if you do not agree with the settlement
- Sign the release form only if you are ready: As part of the process the insurance company will ask you to waive all future rights to pursue the person and company for further payments after settlement. You should take into account future medical bills and any expenses that might arise. Ask an attorney to review the settlement and release.
Unlike property damage liability claims, which average around $3,000 per incident, bodily injury claims tend to be significantly higher. In 2013, the average bodily injury claim was $15,443 as reported by ISO. Bodily injury claims tend to be relatively infrequent however, with only 0.94% of policies experiencing a claim. Based on this data, most bodily injury claims fall within reach of the minimum coverage limits required by the states, with a few exceptions, such as Florida. This should not be used as the sole piece of information in determining your limit, however. There are a wide range of claim amounts that aren't indicated by these numbers, ranging from the fortunate low ones to catastrophically high claims.
|Year||Average Bodily Inury Claim|