March 24, 2010

When To Buy More Than The State Required Bodily Injury Liability Coverage

While every driver is mandated to carry some form of insurance or bond in order to be eligible to drive on any roadway, the nature of these requirements are determined by each state. This means that Oregon has significantly different requirements than California, and New York’s system is a whole different ballgame from that in Illinois. The differences by state can include levels of coverage required, including things like underinsured and uninsured motorist coverage (UIM and UM), bodily injury (BI), as well as what type of fault’ system is used. These factors combine to make up the totality of auto insurance requirements in a state.

One of the most important pieces of coverage, and one that will always be a part of all auto insurance quotes, is bodily injury liability coverage. This coverage is meant to payout for injuries caused to others by the actions of the policyholder. This means that if you get in an accident and injure another driver and their passenger, your BI coverage will pay for their injury treatment costs, getting them to a hospital, and possibly their lost wages and legal costs. Your policy will contain a maximum amount that will be paid out to all parties injured in an accident. This means that a BI coverage maximum of $50,000 would be split between two injured parties. Multiple passengers, or multiple vehicle collisions, can severely reduce the amount paid out to each person. Every state will mandate a minimum limit for BI coverage, and these can range from $10,000 to $50,000.

It is often a good idea to ask your insurance provider for an auto insurance quote that includes a higher level of BI coverage than required by the state for several reasons. The first is that lower levels of BI coverage can be used up quite quickly, leaving the other parties in a position to take legal action against you to recover costs. In ‘no-fault’ states, this option does not exist, but in any state which still uses a traditional or modified tort system, legal action is a real possibility. As well, any drivers who are on the road for extended periods of time should consider increasing their BI coverage. The longer one spends on the road, the greater the chance of an accident.

Increasing BI coverage is truly a case of ‘better safe than sorry.’ Often, it is a good idea to shop around and see what different companies can offer you for car insurance quotes that include greater BI limits. While this will increase your monthly premium, a little bit more per month for insurance is better than a great deal more to pay for another driver’s ongoing treatment or living expenses.