Bodily injury liability pays for things like someone else’s medical expenses and injury-related lost wages if they’re injured in a car accident where you are at fault.
This type of coverage helps protect you from financial losses by covering the injured party’s medical bills, loss of income, and potentially even your legal fees if the injured party takes you to court.
Let’s take a look under the hood at what bodily injury liability insurance coverage is, and how it can help you stay protected behind the wheel.
What is bodily injury liability?
If you’re at fault in a covered car accident that injures another person, bodily injury liability pays for their medical bills, loss of income, or funeral costs. Your insurer will also be responsible for many of your legal fees if the other person takes you to court over the accident.
What does liability insurance cover?
In general, liability car insurance refers to the car insurance coverage that address what happens after a car accident when you’re at fault. It covers and protects other drivers and pedestrians, which is why most states have set minimum coverage limits.
When you see the word “liability” in auto insurance, the coverage pays for someone else’s accident-related expenses, not your own. (But don’t forget that you’ll likely have policy limits applied—more on that in a sec)
There are two types of liability insurance: bodily injury liability, and property damage liability.
Bodily injury liability insurance
Bodily injury liability pays for an injured party’s medical expenses, including things like medical appointments or procedures and medical devices like crutches or a wheelchair. If they’re unable to work while recovering from the auto accident, it would also compensate them for loss of income.
What about any doctor bills you might have, though? Coverage for your medical bills falls under the medical payments coverage in your auto insurance policy. Personal injury protection pays both you, or a passenger’s, medical bills and might compensate you for loss of income.
Depending on the coverage you chose when buying your car insurance policy, it could also help pay legal fees if someone takes you to court. Make sure to take a close look at your policy, since your limits can determine whether or not you have sufficient coverage.
Property damage liability coverage
A separate clause in your insurance policy, property damage liability coverage pays for the repairs to the other person’s property. This coverage pays for auto repairs, as well as to fix property that may have been damaged in a crash, like a fence.
How Do Liability Limits Work?
Coverage limits set the maximum amount that your insurer will pay out. In an insurance policy with what’s known as a split limit, you’ll see them listed in a row like this: $100,000/$250,000.
- The first limit is a per person injury limit and is the maximum amount that will be paid to any one injured person in the accident
- The second limit is a per accident injury limit and is the maximum amount that will be paid to all injured persons in the accident.
Some insurance companies will include a third limit that’s a per accident limit for property damage claims. This is the maximum amount that the insurer will pay for damage to other cars or property resulting from the accident. So you might see $50,000/$100,000/$250,000. (FYI, if you have a Lemonade Car policy, we list property damage coverage separately.)
You may be able to select either a single limit instead. A single limit combines bodily injury liability and property damage liability insurance into one liability limit. If the total costs of the accident—meaning both medical bills, injury-related expenses, and property damage combined—exceed this liability limit, you bear financial responsibility for the remaining expenses.
Per-person limit
This is the maximum amount of what your insurer will pay out per injured person. If you have a per-person limit of $50,000 and the injured person’s medical expenses are $55,000, you might have financial responsibility for the remaining $5,000. Typically your insurer will work to settle any claims presented within your limits and they will let you know if there is an issue.
Per-accident limit
Between medical bills and loss of income, the total cost of a serious auto accident could be significant. The per-accident limit sets the maximum amount your insurer will pay out for injury-related expenses following an accident.
How much insurance coverage do you need?
When you get an insurance quote and pick the amount of coverage you need, your insurance company will probably have a default suggestion to help you end up with a good amount.
Most states have passed insurance requirements with minimum limits for liability coverage. Minimum limits range from $10,000 to $50,000. But you’ll want to price this coverage so that it will cover all of your assets, and since each person has their own net worth, it’s a good idea to select higher coverage limits that can fully protect you. Super high-net-worth individuals might even consider an umbrella policy which offers even more protection.
Feeling lucky? In some states, like Arizona, you can provide proof of financial responsibility to the DMV in the form of a bond, cash, or certificate of deposit, and they will waive your state minimum car insurance requirements. But in the event of a pricey accident, you might end up regretting that decision.
How much does bodily injury liability coverage cost?
The cost of this type of coverage depends on the bodily injury liability limits you pick, the type of car you drive, and other factors‚—like your driving record. When getting an insurance quote, ask your insurance company to show you several options and how they impact your premiums.
How do I determine the right amount of bodily injury liability coverage I need?
Higher liability limits offer greater financial protection in case of a serious accident, whereas lower liability limits will lead to a less expensive premium, but less protection in the event of a serious accident.
Does bodily injury liability insurance cover legal fees if I'm sued after a car accident?
Yes, bodily injury liability insurance will typically cover your legal defense costs if you’re sued for a car accident where you are at fault. It may also help pay for any settlements or judgments up to your policy’s limits.
What should I look for when comparing insurance quotes for bodily injury liability coverage?
When comparing insurance quotes, consider the per-person limit, per-accident limit, and any deductibles. At the very least, you will need to ensure the coverage limits are sufficient to meet state requirements.
Is bodily injury liability insurance mandatory in all states?
Most states require some form of bodily injury liability insurance as part of their minimum auto insurance requirements. However, state requirements vary, so check with your local DMV for specifics.
What happens if I am at fault in a car accident and the other party’s medical expenses exceed my bodily injury liability coverage limits?
If the other party’s medical expenses exceed your policy’s coverage limits, you’ll be responsible for the remainder of the cost above your limit. To lessen the likelihood of this occurring, consider purchasing higher limits for additional protection.
A few quick words, because we <3 our lawyers: This post is general in nature, and any statement in it doesn’t alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade, which differ according to your state of residence. You’re encouraged to discuss your specific circumstances with your own professional advisors. The purpose of this post is merely to provide you with info and insights you can use to make such discussions more productive! Naturally, all comments by, or references to, third parties represent their own views, and Lemonade assumes no responsibility for them. Coverage and discounts may not be available in all states.
