Bodily injury liability pays for injuries or death that you, as the policyholder, or other drivers covered by your car insurance policy, are found responsible for after a motor vehicle accident.
Policy terms vary but typically bodily injury liability car insurance will pay, up to your policy limits, for expenses such as legal defense, medical and funeral expenses, loss of income and pain and suffering.
Importantly, bodily injury liability does not cover your injuries, only the injuries of others that you are liable for in the case of an at-fault accident. For your personal injuries to be covered, you need to purchase additional coverage, such as personal injury protection or medical payments coverage.
At first, it can be confusing to understand what the limits for Bodily Injury Liability mean since there are two sets of numbers, such as 100/300.
What does 100/300 insurance mean?
The first number is the maximum coverage for Bodily Injury Liability for one person injured in an accident (in thousands of dollars).
The second number is the maximum coverage for Bodily Injury Liability for one accident (in thousands of dollars).
To further clarify,100/300 stands for $100,000 per person for bodily injuries sustained in one accident, which tops out at a maximum payout of $300,000 for all claims against the Bodily Injury Liability coverage.
So, the 100 is for the maximum $100,000 per-person coverage and the 300 is for the maximum $300,000 limit for all bodily injury claims from one incident or accident.
What is bodily injury liability coverage?
Bodily Injury Liability (BI) insurance is coverage for other people’s injuries or death for which you are responsible in an accident. Bodily Injury Liability coverage can also provide legal defense if another party in the accident files a lawsuit against you.
In general, you will want enough BI 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.
How much bodily injury liability insurance do you need?
The first part of determining how much BI insurance you need is to determine your state’s minimum insurance requirements. You will need Bodily Injury Liability limits of this amount and possibly more so that your house and personal items are not put in jeopardy if a lawsuit is filed against you due to a crash.
Is 100/300 enough insurance?
The amount you asked about – 100/300 – is the recommended amount. The dual coverage limits refer to the maximum amounts that will be paid per person, per incident, respectively.
If you select limits that are too low, you could be putting yourself at financial risk.
If either you or a driver covered by your policy causes 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 at risk.
By purchasing liability limits to account for both your current assets and future net worth, you are protecting yourself against this risk.
Determining if you need bodily injury insurance coverage above and beyond your state’s minimum limits will depend upon your personal situation. The insurance industry’s recommended coverage amount is 100/300.
50/100 vs. 100/300 insurance
Policy limits for bodily injury liability are per person and per accident and coverage is written as 25/50, 50/100 or 100/300.
So, for 50/100 and 100/300 body injury liability:
The 50/100 means the maximum payout per person injured in an accident you cause is $50,000 and the maximum payout for all people injured in one accident is $100,000.
In the 100/300 example, the maximum payout per person injured in an accident you cause would be $100,000 and the maximum payout for all people injured in one accident is $300,000.
Regardless of the minimum body injury liability your state requires, it’s prudent to buy the most insurance you can afford to protect your assets following an auto accident.