Bodily injury auto liability insurance doesn’t cover a driver’s own injuries; it pays benefits to the occupants of the other vehicle involved in an accident. The insurance company issuing the policy will provide a legal defense if the driver is sued for damages. The bodily injury insurance coverage pays benefits for an injured person’s medical bills, lost wages and general damages for pain and suffering.
In most states, a vehicle owner is required to have bodily injury liability insurance coverage in place and sets a minimum level of coverage required. Bodily injury liability insurance is usually expressed by two numbers, such as 20/40. In this case, the first number is the policy limit for damages sustained by one person in the accident. The second number refers to the policy limit for all injuries sustained in a single accident – no matter how many people were hurt.
Choosing to buy only the minimum amount of liability insurance required by law may not provide a driver with sufficient financial protection. The insurance company will only pay out up to the policy limits (less the deductible). In the case of a serious accident, $20,000 may not cover all the injured person’s medical bills and other expenses. The driver is financially responsible for paying the balance of any judgment owing. Rather than run the risk of having to sell possessions or have wages garnisheed to pay the outstanding balance, a better choice is to buy sufficient coverage in the first place.