What is Liability/Bodily Injury Coverage?

Last time, we discussed the importance of knowing what and how much coverage you have by requesting your Declarations Page.  Once you get a copy of your Dec Page, it is also important to know what the types and amounts of coverages on that page actually means. Let's start with Liability or Bodily Injury Coverage.

Liability coverage is how much your own insurance company will compensate someone else that you injure in the unfortunate event that you are the one responsible or at fault for causing a collision. Conversely, if you are injured by a negligent driver, that driver's liability coverage indicates how much potential coverage that insurer will compensate you for injuries their driver has caused. 

This coverage includes injured motorists, cyclists, pedestrians, and passengers, but does not include injury to the negligent driver himself or herself. In other words, your liability coverage will not cover injuries you sustain as a driver if you are fully responsible for causing the collision. It will, however, cover you as a passenger if the driver driving the covered vehicle  is at fault. If you were the negligent driver, it will cover your injured passengers as well.

The first number indicates the maximum amount of coverage the insurer will pay out to any one injured person, while the second number indicates the maximum amount of coverage the insurer will pay out for any one accident in the event that multiple people were injured. In Arizona, the minimum amount of liability coverage a motorist is required to have is $25,000/$50,000. In many cases involving more than minimal injury, this is often not enough.

These numbers indicate the most your insurance company will ever pay. If the injured party or parties' damages exceed what is available under your policy, the injured party is legally entitled to go after you personally for the outstanding amount. This is why It's important to know how much coverage you have so you can protect yourself from personal financial responsibility.For this reason, it would be wise to talk to your insurance adjuster and/or financial advisor to determine if you have enough. 

It's also important to know what exceptions to your liability coverage your insurance company will not cover. Many policies will not cover you if your actions were criminal/intentional or  if the injury was not directly related to driving a vehicle (for example, shooting a gun from a vehicle or sexual assault in a vehicle could potentially be excluded under both exceptions depending on the circumstances). Many policies also exclude coverage if you were using your personal vehicle as a ride-share (i.e. if you caused a collision as an Uber driver). For this reason, if you are in fact a ride-share driver, it is imperative to know if you are covered under your policy and/or the policy of the company you ride-share for.