Auto insurance - how much bodily injury liability should I have?


At the barest minimum, you need to meet the state's minimum requirements for bodily injury liability. These may vary from state to state. However, the minimum requirements may not stand up to a substantial claim for bodily injury.

If you are found liable for bodily injury (i.e. the accident that caused injury to others was due to your fault), you can expect a liability claim. You will be asked to pay for:

  • Their medical bills
  • Any income they have lost as a result of needing to be in the hospital and recuperate from the injury
  • Any expenses involved in rehabilitating the patients
  • Compensation if the patients are declared disabled, or worse, if one of the injured parties dies
  • Compensation for pain and suffering

This portion of the insurance is paid on a per-person limit and a per-accident limit. That means each injured party will only be paid up to a maximum amount. Also, all the payments made by the insurance company for liability claims towards this incident also have a maximum limit, and this limit will hold regardless of how many people were injured.

Can you imagine how much you will stand to pay if you will be made to pay for all these for five or more people? If you only have the minimum liability coverage, what will happen is that the insurance company will pay for the liability up to the maximum limit of the policy. Then, the lawyers of the injured parties will run after you in an effort to recover the full amount of their claim. This means that they will be looking to your assets as the means to pay for this liability.

Now, if you don't have much my way of personal assets, the minimum liability may suffice, since the injured parties (and their lawyers) will think that running after your assets may not be well worth the effort.

Thus, the general rule is to get enough liability to match your assets.

Another important reminder: bodily injury liability will not pay for your injuries. You will need a Personal Injury Protection coverage to cover your personal injuries.

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