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Bodily injury coverage, also called BI, is a type of insurance coverage that pays for bodily injury to people who are not specifically covered on the insurance policy. In the case of car insurance, it will pay medical expenses for people who are injured by the driver named in the insurance policy. Some businesses also take out this type of coverage to protect themselves if someone is injured on their premises, and some home insurance includes a BI option.
Most people think of bodily injury coverage specifically in terms of car insurance, because car accidents can cause a significant of physical damage to third parties. Medical expenses can quickly rack up, and once fault in the accident has been determined, the injured parties are entitled to reparations from the person at fault. These reparations may include basic medical expenses including rehabilitative therapy, psychological therapy, or even a sum for missed work and pain and suffering.
In many parts of the world, drivers are required to purchase bodily injury coverage when they establish a policy for car insurance. This coverage is usually indicated on an insurance policy in an x/y format, where “x” refers to how much money will be paid out per person, and “y” is the total amount of money an insurance company will pay out for a single accident. In the United States, the insurance industry recommends 100/300 coverage, which means that up to $100,000 US will be paid per person per accident, and $300,000 USD will be paid in total per accident. In some regions, the coverage also covers legal fees related to the accident.
Generally, there are a number of options for bodily injury coverage, starting with the minimum required by the government. Government minimums tend to be low, but they will cover basic medical expenses in a simple accident. People who want more assurance of coverage can buy up, getting a policy with a higher coverage. Some people choose to buy more insurance to protect their personal assets, as a lawsuit over accident damage can result in liquidation of real estate, securities, and other assets to pay the claimant.
When establishing an insurance policy, you should ask your insurance agent about the best type of bodily injury coverage for you. If you only drive once a week in rural areas, for example, you may not need an expensive plan. If you drive frequently in congested urban areas, a higher bodily injury limit might be a good idea. You may also want to ask for BI options with home and business insurance as well, ensuring that people who are injured on your property will be covered.