Auto Insurance Liability Claims: Bodily Injury and Property Damage

A driver who has been involved in an at-fault accident may be faced with two types of auto insurance liability claims: bodily injury and property damage. In a tort state, the occupants of the other vehicle can sue the driver who was responsible for the accident for personal injuries and lost wages stemming from the incident. People living in no-fault states would make a claim for personal injuries to their own insurance provider first. The right to sue to recover damages is limited to situations where the accident caused serious and permanent injuries.

Bodily injury liability coverage pays for medical bills and rehabilitation expenses incurred by the occupants of the other vehicle following an accident. In some parts of the U.S., an injured person also has the right to sue for compensation for his or her pain and suffering. The insurance company will pay for these damages, up to the policy limit the customer has decided to buy. The liability portion of the policy also pays for legal fees involved in defending an action brought by accident victims to recover damages.

Property damage liability insurance pays for the cost of repairing the other driver’s vehicle following a collision. It also pays for repairs to public property damaged in the accident. If the damage caused in the accident includes items like buildings, sheds, fences, sign posts, mail boxes or light stands, repair costs are covered under the property damage part of the policy.