A liability auto
insurance policy is required in most states. A typical
liability policy includes bodily injury (BI) and property
damage (PD) policies together. The reason is simple: After
an accident, the driver responsible must be able to pay for
damages incurred. These two policies are usually bundled together.
The bodily injury (BI) section of the liability insurance
policy usually covers doctor and hospital bills for the injured
parties as well as other related expenses such as rehabilitation,
medicines and lost income.
The minimum policy required by most states is the maximum
amount the policy will pay for bodily injury to one person
and also the maximum for all persons hurt in an accident.
Typically these two maximum amounts (listed in thousands of
dollars) are listed together with a slash such as: 50/100
This example indicates a $50,000 maximum payout to one injured
party and $100,000 maximum payout for all people hurt in the
course of one accident.
NOTE: The states require a minimum amount of coverage, but
drivers can usually buy higher insurance amounts. Generally
higher coverage is not that much more expensive. Higher coverage
will protect the driver from law suits and possible bankruptcy
in case of a severe accident. |
