Bodily injury liability (known as BI or BIL) and property damage liability (known as PD or PDL) are types of liability insurance that most all states require as part of a motorist's minimum auto insurance coverages.
Liability coverage helps protect you from covered damage your car does to others, damage for which you are legally liable and without liability insurance would have to pay out of pocket for damages you cause. In some cases, these damages could grow into hundreds of thousands of dollars.
Liability coverage is the foundation or basis of an auto insurance policy normally, and is required in most states. State liability laws differ, but the most require liability coverage you asked about, bodily injury and property damage.
The purpose of BI and PD is if you are at fault in an accident, your liability insurance will pay for the bodily injury and property damage expenses caused to others in the accident, including your legal bills.
Bodily injury liability insurance is coverage for other people's injuries or death for which you are responsible. Claims for bodily injury may be for such things as medical bills, loss of income or pain and suffering. Bodily injury coverage can also provide legal defense if another party in the accident files a lawsuit against you.
In general, you'll want enough bodily injury insurance to cover a judgment against you in a lawsuit, so that your personal assets are not put at risk. You should always buy the maximum amount of insurance that you can afford.
When obtaining bodily injury liability insurance you have to determine what limits you should have. First you to find out your state's minimum limits. You will need bodily injury limits of at least this amount and possibly more so that your house and personal items are not put in jeopardy if a lawsuit comes about due to a lawsuit.
If you select limits that are too low, you could be putting yourself at risk financially. For example, if either you or a driver covered by your policy cause a serious injury where damages exceed your limits, you will be held responsible for the amount above your limits. To make that payment, you could be forced to liquidate property, savings, and other assets, or your future earnings could be attached. By purchasing liability limits to account for both your current assets and future net worth, you can help protect yourself against this risk.
Determining if you need bodily injury insurance coverage above your state's minimum limits, will depend upon your own personal situation. The insurance industry's recommended coverage amount is 100/300. This would give you coverage of $100,000 per person for a total of $300,000 per incident. Remember this coverage is for those that you may harm in an accident, not you being injured as a driver that causes an accident.
Property Damage is another type of liability coverage that covers you if your car damages someone else's property. Usually it is their car, but it could be a fence, a house or any other property damaged in an accident. It also provides you with legal defense if another party files a lawsuit against you.
Just as with your bodily injury coverage, you need to keep in mind that if you cause a serious accident a state's minimum PD limits may not cover you adequately. In most states drivers are allowed to sue other drivers who are responsible for car accidents. If your PDL limits are exceeded, meaning your liability insurance limits are not high enough to pay for all of the damages, you could be sued by the person you damaged and then your personal finances could be at risk.
Remember, bodily injury and property damage liability coverages are there to cover those that you caused injury to or damage to property and do not cover you or your vehicle in any way. To cover your own vehicle you would need physical damage coverages of collision and comprehensive. For medical coverage for you there are coverages such as Personal injury protection (PIP) and Medical Payment (Med Pay).
If you are trying to determine what coverages are right for you use our insurance coverage calculator. Once you have determined your needs, come to us for a quote on liability or full coverage auto insurance for your vehicle.