How High is Your BI and PD?

If you look at your automobile insurance policy, you will see a listing for liability coverage. This includes coverage for bodily injury (BI) and property damage (PD).  What exactly is covered under BI and PD? Bodily injury coverage

Bodily injury coverage compensates the driver of the other vehicle and its passengers and pays for their medical expenses when you are responsible for an accident. It also covers the passengers in your vehicle.

It is important to know that bodily injury coverage does not pay for your own injuries. And if you deliberately cause damage to a person or their property, your liability insurance will not cover the damage.

Take a look at your policy. Liability insurance always includes two different bodily injury limits, for example: $15,000/$30,000. The first amount is the maximum your insurance will pay for bodily injury to a single person in an auto accident; the second amount is the total maximum your insurance will pay for bodily injury if multiple people are hurt in a car accident. Bodily injury coverage may help pay for long-term nursing care, lost income from time off work, and pain and suffering, although this amount is determined by a court to address the emotional or physical stress the accident or injuries caused.

Taking into consideration the above bodily injury limits of $15,000/$30,000. Do you think these amounts will be sufficient to pay for injury-related costs in an accident you caused? If not, then you are open to lawsuits for the rest of those medical costs and that means your assets, including your home, are at risk. In fact, if you don’t have enough insurance coverage to play a claim, the injured party can sue you and pursue your assets, including your vehicles, bank accounts, driver’s license and any property you own.

A good rule of thumb is to purchase the highest bodily injury liability coverage you can afford. Coverage should depend on what assets you have to protect. We suggest starting at $250,000/$500,000.

If you have substantial assets, consider purchasing a $1 million umbrella policy, which provides additional coverage for liability claims.

Property damage coverage

This coverage will pay for the repair and replacement of the other person’s vehicle or property in the event of an accident. State-required minimums are as low as $5,000. That’s fine if during the accident you take out a portion of fencing or some hedges. What if you demolish someone’s Range Rover or Lexus? That $5,000 coverage won’t begin to cover the cost of repairs or replacement. You should consider increasing your property damage to $250,000. Once more, to obtain even higher limits, we recommend the purchase of a $1 million umbrella policy.

Call E. R. Munro and Company at 1-877-376-8676. We’ll be happy to answer your questions regarding bodily injury and property damage liability coverage.