A quick refresher on liability coverage
Bodily Injury and Property Damage Liability coverage make up the core of your car insurance policy; here’s what they do and what to think about when choosing coverage levels
There are two types of liability coverage on your car insurance—Bodily Injury (BI) and Property Damage (PD).
They cover your legal liability if you’re at fault in an accident that involves injury to others (people in the other car, pedestrians, etc.) or damage to owned property (fences, garage doors, light poles, etc.)
Understanding coverage limits
It gets a little more involved when it comes to the limits of your liability coverages.
A limit is the maximum amount your insurer will pay, per accident, for a covered claim. Anything above the limit is your responsibility. You choose your limits for BI and PD when you buy your policy.
BI and PD limits can be listed on your policy in a couple of ways.
The first way is to list them as three separate dollar amounts.
- The first refers to the maximum amount to be paid per person for injuries (in other words, no individual will get more than this amount).
- The second is the maximum amount to be paid for all injuries (when you add up all the BI payouts, the total can’t exceed this amount).
- The third is the total amount to be paid for damage to property.
As an example, the limits might read like this on your policy: “100/300/100.” This translates to $100,000 per person for BI, $300,000 total per accident for BI, and $100,000 for PD.
The second way is to list them as a “combined single limit.” Rather than three separate dollar amounts, it’s a single maximum payout amount that applies to all injuries and property damage in a covered accident.
How much coverage do you really need?
Progressive’s internal data shows that less than two percent of our customers ever file a BI claim. And about 97 percent of those who do file a claim require less than $50,000 total for BI losses.
Remember, though, that insurance is meant to cover those rare but sometimes severe loss situations. The premiums you pay will reflect the liability exposure you select in your limits. You’re paying for peace of mind.
This is why it’s important not to just arbitrarily choose your bodily injury liability and property damage liability limits. Just call us, or your independent agent, and ask for a policy review. Any of these methods will help you figure out whether a particular coverage limit is too high or too low for your particular needs.
You might think it’s odd that a car insurance company would tell you something like this, but we’d rather help our customers achieve the kind of “just right” balance they want.