Understanding Automobile Insurance, Part 1: Bodily Injury (BI) Liability Coverage

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Understanding auto insurance coverage (what you have and what you may need) can be a confusing and frustrating process.  This is the first in a series of articles which  explains some basic facts about the different types of auto insurance, including: what the

coverage is called; how the coverage protects you; what is covered; and what the policy limits mean (how much coverage you have).


Every TSC>Direct auto insurance policy includes a “declaration page” which lists the types of insurance and coverage amounts (limits) that the policy provides.  This article discusses the first coverage listed on the declaration page, “bodily injury liability” coverage (“BI” for short).


BI coverage pays damages (money, up to the policy limit) for bodily injury for which an insured is legally responsible because of an automobile accident.  Sounds nice, but what does this mean?  An example may help.


Mr. Smith, a TSC>Direct insured, has an auto accident and Ms. Jones, the driver of the other car, is injured.  If Smith is found to be responsible (all or in part) for the accident, Jones may recover damages (money award) for her “pain and suffering” and other damages.  The BI coverage of Smith’s auto policy would pay those damages, up to the policy limit stated on his declaration page.  If Jones sues Smith due to the car accident, Smith’s BI coverage would also pay for a lawyer (chosen by  TSC>Direct) to defend him in the lawsuit, and would also pay for court costs and lawsuit expenses.  In short, Smith’s BI liability coverage protects him against the car accident related injury claims or lawsuits of other people.


New York law requires that every car owner have BI insurance with policy limits of at least $25,000/$50,000.  Higher policy limits (for example, $100,000/$300,000) are optional.  While higher limits provide more protection, they are more expensive.  What do these “policy limits” numbers mean?


The policy BI coverage limit is listed on the declaration page as a single dollar amount (for example, $300,000) or as two separate dollar amounts (for example, $25,000/$50,000 or $100,000/$300,000).


If a single amount is listed, that is the maximum amount available for all (whether one or more) bodily injury claims or lawsuits which arise from any one auto accident.


If two separate amounts are listed, these are the “per person” (first number) and “per accident” (second number) policy BI limits for any one accident.  If a policy includes $25,000/$50,000 BI limits, and an accident occurs, the maximum BI coverage available is $25,000 for each injured person and $50,000 total for the accident.  If one person claims injury in the accident, the $25,000 policy limit applies.  If two or more people claim injury in the accident, the $50,000 policy limit applies (still subject to the $25,000 limit for each person).


Hopefully, this short explanation of bodily injury liability helps clarify how this insurance coverage protects you.  This column is not intended as legal advice.  If you have any other questions about BI coverage, please contact the TSC>Direct customer service department.

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